Private-sector job growth blows past expectations in December, ADP says

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U.S. companies hired employees at the fastest pace in seven months in December, before a surge in the new omicron coronavirus variant cast a fresh threat over the economic recovery, according to the ADP National Employment Report released Wednesday morning. 

Companies added 807,000 jobs last month, blowing past the 400,000-job gain that economists surveyed by Refinitiv had predicted and the revised 505,000 positions added by companies in November. It marked the best month for private payroll growth since May, when employers added 882,000 jobs.

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Job gains were broad-based across sectors. Service-providing industries added 669,000 new jobs last month, with the largest increases in leisure and hospitality (246,000), trade, transportation and utilities (138,000), professional and business services (130,000) and education and health services (85,000). Goods-producing industries, meanwhile, saw payrolls grow by 138,000, with the bulk of the gains in manufacturing (74,000) and construction (62,000).

FILE – A traveller wheels her baggage past a now hiring sign outside a bar and restaurant Saturday, Oct. 9, 2021, in Sioux Falls, S.D. ((AP Photo/David Zalubowski) / AP Newsroom)

In all, U.S. companies saw an average monthly job gain of 625,000 in the final three months of the year, surpassing the 514,000 average for the year. Job gains in 2021 eclipsed 6 million, but private-sector payrolls remain nearly 4 million jobs short of pre-pandemic levels

Still, the report only includes data from the first half of the month, before a stunning rise in cases driven by the highly transmissible omicron variant. The U.S. is now reporting a seven-day moving average of more than 122,000 cases. 

While it's still unclear how the fast-spreading variant will ultimately mean for the health of the economy, its effects on daily life have already been felt: Thousands of flights have been canceled, Broadway shows are shuttering their doors and a growing number of schools have postponed their reopenings.

FILE – A Now Hiring sign at a business in Richmond, Va., Wednesday, June 2, 2021. (AP Photo/Steve Helber / AP Newsroom)

"December's job market strengthened as the fallout from the delta variant faded and omicron's impact had yet to be seen," said Nela Richardson, ADP chief economist.

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The ADP report precedes the release of the more closely watched jobs report from the Labor Department’s Bureau of Labor Statistics, which is expected to show the economy added 400,000 jobs last month and the employment rate inched lower to 4.1%. 

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