US employers added the most jobs in more than a year in November as hiring gathered pace, a new payroll report shows.
Private sector employers added 206,000 jobs in the month, far ahead of economists' expectations for a gain of 130,000 jobs, the latest ADP National Employment Report showed.
The result was the best result since March 2010 and is expected to cause economists to raise their forecasts for Friday’s non-farm payroll data from the US government.
“This follows on from a string of improving labour market numbers, including a jump in the jobs plentiful diffusion index from yesterday’s Conference Board consumer confidence report.,” said ING economist James Knightley.
“Assuming we get a rise in the ISM employment component tomorrow, then our current forecast of a 130,000 rise in non-farm payrolls on Friday looks too low given evidence elsewhere. Indeed, something in the 150-180,000 range now looks achievable.”
But some experts cautioned that much of the increase was a “seasonal adjustment quirk” that had seen November ADP readings come in at well above the underlying trend in six of the past seven years.
“In 2010 and 2011 ADP was an average of 64,000 better than the prior three-month average, so applying the same margin today suggests the "real" Nov ADP number was 140,000 [new jobs created],” said Ian Shepherdson, chief US economist at High Frequency Economics.
“That's an improvement, given the 115,000 average in three months to October, but not quite as spectacular as the headline appears.”
The ADP report showed most hiring coming from small companies, with fewer than 50 employees. These created 110,000 jobs while medium-sized firms added 84,000 jobs and large firms created only 12,000 jobs.