Businesses hired at the fastest pace in seven months in December before concerns escalated over rising Covid cases, according to a report by payroll firm ADP on Wednesday.
Private job growth for the month totaled 807k, well above the Dow Jones estimate of 375k and November’s 505k gain. The November total has been revised down from the originally reported 534,000.
The total was the best for the job market since May 2021, at 882,000, according to ADP data.
Hiring was broad-based, with leisure and hospitality leading the way with 246,000 new jobs. Trade, transportation and utilities contributed 138,000, professional and business services increased 130,000, and education and health services added 85,000.
While the service professions were at the top with 669,000 new hires, the goods-producing side also saw strong growth. Manufacturing increased by 74,000 and construction contributed 62,000 to the total.
The job gains came in the same month that rising Covid cases sparked renewed fears of an economic slowdown. The US reported 1 million new positive cases in a single day earlier this week as the Omicron variant is widespread in the population.
However, the ADP report, prepared using Moody’s Analytics, extends to mid-December, ahead of the worst of the escalation.
“The job market rebounded in December as the impact of the Delta variant wore off and the impact of Omicron was yet to be seen,” said Nela Richardson, ADP’s chief economist. “Job gains were broad-based as commodity producers added the strongest value of the year while service providers dominated growth.”
The release comes two days ahead of the more closely watched report on nonfarm payrolls from the Labor Department’s Bureau of Labor Statistics, which the Dow Jones consensus estimate is expected to show growth of 422k.
Following the ADP release, Goldman Sachs increased its estimate for nonfarm payrolls to 500,000 in December, up 50,000 from its previous estimate.
The two counts can differ significantly: In the 12 months to December, the ADP number averaged about 441,000 per month, while the BLS averaged 483,500.
Companies with 500 or more employees accounted for the bulk of December’s gains, adding 389,000 jobs. Medium-sized companies contributed 214,000, while companies with fewer than 50 employees contributed 204,000.
The rapid pace of hiring reflects trends in weekly jobless claims, which are at their lowest in more than 50 years.
However, overall employment remains well below pre-pandemic levels. Even with the unemployment rate down from its pandemic high of 14.8% to its current 4.2%, compared to February 2020, about 3.6 million fewer Americans are working and the labor force is nearly 2.4 million smaller than that Labor force participation rate up 1.5 percentage points according to BLS data through November.