This morning’s ADP stunning employment report suggests that Friday’s nonfarm payroll data should come in strong, according to Tom Sowanick, Co-President and Chief Investment Officer of OmnivestGroup.
ADP stated that the private sector created 297,000 jobs from November to December – apparently, the highest number the payroll firm has ever reported and far above the 100,000 figure economists had predicted,
“While there is slippage between the ADP report and this Friday’s release of the government’s reading on labor conditions, the direction is generally in sync,” Sowanick said.
“Even though 297,000 new jobs seems hard to believe given the current environment, it is important to note that the ADP reading has been positive now for the past eleven months.”
Sowanick cited that the employment data should no longer be influenced by the migratory nature of the census workers.
“Instead, a healthy increase in new car sales and the opening of new showrooms should help elevate employment over the months ahead,” he noted.
“This Friday’s employment report will confirm whether the ADP release was too good to be true or a signal that the economic conditions are improving at a rapid pace.
In December, the government reported that U.S. employers created 39,000 jobs in November, far below expectations. The jobless rate edged up to 9.8 percent.