Private Sector Adds 215K Jobs in December

By Ruth MantellMarketWatch

Private-sector job gains picked up speed in December, with the largest monthly increase since February to end the year on a “solid footing,” according to a Thursday morning report from payrolls processing firm Automatic Data Processing Inc.

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The U.S. added 215,000 private-sector jobs in December, ADP ADP +2.56%  estimated Thursday, led by a gain of 187,000 service-providing jobs. Economists polled by MarketWatch had expected a gain of 149,000 private-sector jobs.

“The job market held firm in December despite the intensifying fiscal-cliff negotiations in Washington,” said Mark Zandi, chief economist of Moody’s Analytics, which produces the report based on data from ADP. “Businesses even became somewhat more aggressive in their hiring at year end.”

There was also good news for November: ADP upwardly revised November’s result to a gain of 148,000 private-sector jobs from a prior estimate of 118,000.

Looking at industries in December, Zandi said the gain of 39,000 construction jobs was particularly encouraging, though Hurricane Sandy was likely behind the jump.

Some analysts use ADP’s data to provide guidance on the U.S. Department of Labor’s employment report, which is due Friday and covers private-sector and government jobs. However, economists are wary of placing too much importance on ADP’s December reading given past misses, though ADP recently changed its methodology.

Currently, analysts expect the government to report that nonfarm employment rose 153,000 in December, compared with a gain of 146,000 in November.

Elsewhere Thursday, outplacement consultancy Challenger, Gray & Christmas reported that layoffs announced in December plummeted from the prior month, and 2012 saw the lowest annual total for announced layoffs since 1997.

“The overall pace of downsizing was at its slowest since the end of the recession. In fact, we have not seen this level of job cutting since before the collapse and subsequent 2001 recession,” said John Challenger, chief executive.

Meanwhile, the Labor Department said first-time claims for unemployment benefits rose 10,000 to 372,000, which marks a five-week high.