Market Overview

ADP Shows Largest Payroll Increase In Nearly 2 Years

ADP Shows Largest Payroll Increase In Nearly 2 Years

While U.S. investors are concerned over a potential economic slowdown in 2019, the latest data from ADP and Moody’s suggests the private sector jobs market is booming.

On Thursday morning, an ADP/Moody’s report found U.S. private payrolls were up 271,000 in December, the largest monthly gain since February of 2017.

Why It’s Important

The December private payrolls number blew consensus expectations of a 178,000-job gain out of the water and signal the U.S. economy isn't approaching a slowdown as of yet.

The final jobs number of 2018 brought the average monthly gain for the year to 208,000.

December’s jobs number is especially reassuring after the private sector payroll gains in November were revised downward from 179,000 to just 157,000, its slowest growth of the year. Now that the December number is out, that potentially troubling November dip looks less like the beginning of a trend and more like a potential outlier.

Professional and business services were the top contributor to the jobs market in December, adding 66,000 jobs. Natural resources and mining remained a soft spot, losing 2,000 net jobs.

What’s Next

The S&P 500 bounced a bit in pre-market trading following the jobs report but was still on track for a lower open following a large guidance cut by Apple, Inc. (NASDAQ: AAPL).

Investors concerned about the strength of the economy will be watching out for the government’s nonfarm payroll report due out Friday morning. Economists are expecting the government to report 176,000 new jobs in December and the unemployment rate to have dropped to just 3.6 percent.

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