This morning ADP released its December Employment Report estimate and once again results came in well ahead of expectations. The payroll firm says about 238,000 jobs were added to the private sector, well ahead of expectations of 200,000 and a big improvement over the 200,000 payroll increase of 215,000.
Don’t look now but the economy just might be picking up steam. That’s not to say things are going gangbusters or that the reports are perfect measures, but when every available measurement tool is showing job growth it’s hard to deny at least some improvement.
As it turns out America’s employment situation has been improving for a while now. Bob Doll of Nuveen Investments has made a record high in private sector employment one of the highlights of 10 Predictions for 2014 report. In the attached clip, Doll makes the case private sector employment has been quietly improving for quite some time.
“Private employment is not that far from an all-time high” Doll claims in the attached clip. It seems like an absurd claim on the surface and I delicately suggest Doll is offering a bald-faced lie. Doll stuck to his guns and, as it turns out he’s right.
The number isn’t a function of fuzzy percentages. The ADP data is just an absolute number. Participation and other percentage-based abstractions don’t apply. ADP is just counting the number of folks getting paid by employers that actually sell a good or service to the public (as opposed to working at the DMV et al).
It’s not population growth either. The record high came in early 2008. The country has grown since then, but not enough to account for making record highs in private employment. According to census estimates the country has added about 4 million people since 2008 (). Federal employee totals have shrunk, yet private employment is once about 700,000 off all-time highs, not including the net additions from this morning.
In the clip I look for several other bogus potential explanations. Doll says none apply. Corporations and small businesses actually seem to be hiring. Maybe not great jobs or even full-time work, but the economy is adding to its base of people bringing home a paycheck from someplace other than the government.
“I don’t want to get carried away,” Doll says of total employment rate, “but I do think the economy is going to add more jobs in 2013 than they did in 2014.”
Whether or not you think the rate of change is as it should be is another conversation, but it’s getting tough to argue that things aren’t moving in the right direction.
Disclaimer: Merrill Lynch is not responsible for the editorial content of this program.
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