U.S private firms employment grew more than expected in December from November, with much of the gains concentrated in the services sector, according to a report from ADP Research Institute. It marks the largest monthly increase since March.

The service sector has long been a rampart of the economy, but hiring by employers witnessed the biggest surge in 18 months, which more than counterpoise the slower employment by goods-producing firms.

The total private employment edged higher from the sluggish yet strong November data up to 250, 000, including 222,000 in the services sector, the report showed.

The figures from the ADP report far exceeded the 190, 000 consensus forecast by the economists, and could indicate a robust December payrolls report. Especially strong fields were professional and business services, with 72,000 more employees, and education and health services, which added 50,000.


“The job market ended the year strongly,” said Mark Zandi, chief economist of Moody’s Analytics.

“Robust Christmas sales prompted retailers and delivery services to add to their payrolls. The tight labor market will get even tighter, raising the specter that it will overheat.”

The goods-producing sector hired 28,000 more employees in December, which was a big slump from the previous month, but fairly strong for the last month of the year, especially with 16,000 added in construction.

However, the industrial employment decelerated to just 9,000 after four solid months, although the November gain, reported at first as the strongest on record, was revised down by 10,000 to a more routine 30,000.


“We’ve seen yet another month where the labor market has shown no signs of slowing,” said Ahu Yildirmaz, VP and co-Head of the ADP Research Institute.

“Throughout the year there was significant growth in services except for an overall loss of jobs in the shrinking information sector. Looking at company size, small businesses finished out 2017 on a high note, adding more than double their monthly average for the past six months.”

The consensus estimate for the Labor Department’s non-farm payrolls report is for an increase of 188,000 last month, with a gain of 185,000 expected for private employment.

The report from ADP includes 411,000 companies and 24 million workers and is used as an indication of the whole labor market, even while it does not always track the official jobs report closely, since the two months report utilize different data.

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