US private sector jobs growth highest since November 2012

238,000 more people in the US were employed in December than November, according to data released by Automatic Data Processing (ADP).

The impressive increase in jobs created in the private sector came in above expectations of 200,000 and is the highest in 13 months. It follows November's rise of 229,000 - which was revised up from 215,000.

The survey comes two days ahead of the US government's figures on jobs created in December, the closely-watched non-farm payrolls, which include public sector jobs, too.

An improving labour market has been suggested as a key motivator behind the Fed's decision to start tapering.

Paul Ashworth of Capital Economics says that, although the research group is "not entirely convinced" as to how useful an indicator on non-farm payrolls the ADP survey is, as far as it can be trusted, it points to a further solid gain of 200,000 this Friday:

The unseasonably bad winter weather in December means that there is a good chance the non-farm payrolls figures will come in a little below the ADP.

That's because the latter counts anyone on the payroll as employed, regardless of whether they turned up for worked or were paid in that month. In contrast, to be counted as employed in the payroll survey, employees have to be paid for at least one day's work.

When it comes to Fed action, Ashworth says that monthly gains of 200,000 will probably see the Fed stay with its current tapering of $10bn at each Federal Open Market Committee of this year. If this goes up nearer to 250,000, though, then "the Fed would presumably wind down its asset purchases more quickly."