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ADP Jobs, Jobless Claims Both Surprise to Downside

Thursday, January 5, 2017

Due to the New Year holiday week, the monthly ADP ADP report that usually comes out on Wednesday was released ahead of today's bell, instead. A total of 153K new private-sector jobs were created in the month of December, far lower than the 168K analysts had expected.

November's big jobs-producing month has been revised down slightly to 215K. This figure was a positive surprise from October's lackluster 124K, but overall since mid-2016 we are seeing job growth slowing steadily from the routine 200K+ reads most months since the jobs recovery plateaued in the aftermath of the Great Recession.

The vast discrepancy between Goods and Services continues in this report: while Services provided 169K new jobs last month, Goods shed 16K, including -9K in manufacturing and a surprise -5K in mining. Biggest industry hires were in Trade/Transportation (82K), Education/Health (29K) and Leisure/Hospitality (18K).

Looking ahead to tomorrow's Bureau of Labor Statistics (BLS) non-farm payroll report, ADP estimates a gain of 183K, up from last month's 178K total. Also, average hourly wages are expected to tick up 0.3% from dropping a basis point in November. Smaller companies (under 50 employees) are again showing the smallest gains in new private-sector jobs at 18K; Medium-sized companies reached 71K and Large firms up 63K.

Initial Jobless Claims also were reported ahead of today's market open, shedding 28K claims from last month's revised total to 235K. Continuing claims, however, have risen again, to 2.11 million. Still historically low, but notably above the point we cracked below 2 million continuing claims for a week a month or so ago.

Market futures are all marginally lower at this hour, but they were that way before the ADP report was released. We see tomorrow's BLS report having greater potential to move markets in either direction.

Mark Vickery

Senior Editor

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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