Friday’s jobs report may show moderate growth
WASHINGTON – After the poor job growth in December and a recent series of weak economic data, all eyes will be on this Friday’s employment report for January from the Labor Department. Another bad month will further darken the outlook, while a strong rebound could revive the optimism that many had at the start of the year.
There’s a good chance, however, that the numbers will be somewhere in the middle.
In what may be a preview of Friday’s report, the payroll firm Automatic Data Processing Inc. said Wednesday that its data showed private businesses added a moderate 175,000 jobs last month. That is slightly less than the average monthly job growth in the past three years and in line with what many professional forecasters are expecting the Labor Department to report.
The department said last month that employers added just 74,000 jobs in December, but economists largely dismissed that number because of unusually cold weather and some other apparent anomalies. Making the data even more suspect was the unemployment rate’s decline in December to 6.7 percent from 7 percent in November as more people dropped out of the labor force.
Analysts remain hopeful that the economy and job market will kick into slightly higher gear this year, thanks to strengthening home construction, business investment and consumer spending. But doubts have increased as financial problems in emerging markets have hammered stocks and a series of weaker-than-expected economic data – including car sales, manufacturing and construction spending – have further hurt confidence.
Construction employment fell in December, but if ADP is right, it bounced back last month to add 25,000 jobs. ADP says manufacturing, however, lost 12,000 jobs in January. The report indicates that professional and business services added the bulk of new jobs.
The ADP report should be taken with a grain of salt. As analysts at UBS Securities noted, its estimates have missed the official Labor Department count by about 50,000 jobs a month on average.