Private-sector job growth strong

The private-sector labor market heated up significantly last month as companies added 215,000 jobs, the most in a year, in a surprisingly positive sign for the economic recovery, payroll processor ADP said Wednesday.

The figure beat economists’ expectations of 185,000 net new private-sector jobs.

Job growth for October also was revised up significantly to 184,000, from ADP’s initial report of a disappointing 130,000, indicating that companies’ ability to weather the partial federal government shutdown and the political battle over raising the debt limit that month was better than expected.

“The job market remained surprisingly resilient to the government shutdown and brinkmanship over the Treasury debt limit,” said Mark Zandi, chief economist of Moody’s Analytics, which assists ADP in its monthly report.

“Employers across all industries and company sizes looked through the political battle in Washington,” he said. “If anything, job growth appears to be picking up.”

November’s figure was the best since ADP reported 276,000 net new jobs created in November 2012.

The gains were broad-based, with the service sector leading the way with 176,000 jobs added, up from 156,000 in October, ADP said.

The construction and manufacturing industries each added 18,000 jobs last month. It was the largest gain in construction jobs since February, ADP said.

The gains in manufacturing and construction are important because those are well-paying, middle-income jobs, Zandi said.

The ADP report is an important precursor to the federal government’s monthly jobs report, due out Friday.

The Labor Department is expected to report that total job growth for the private and public sectors slowed in November to 180,000, down from 204,000 the previous month. Economists project that the unemployment rate ticked down to 7.2 percent last month, from 7.3 percent in October.

ADP’s numbers suggest that the Labor Department figure could be around 200,000, Zandi said.

But he added that complications with data collection related to the government shutdown, as well as difficulties with seasonal adjustments because of the later start of the holiday shopping season this year, could lead to a Labor Department number closer to 175,000 jobs.

Still, the strong November private-sector job growth is a positive sign heading into 2014, Zandi said.

If there is not another government shutdown in mid-January, when federal funding runs out again, and no new battle over raising the debt limit, which is expected to be hit in early February, the economic recovery should pick up, he said.

“If Washington doesn’t botch it early next year and keeps the government open and raises the debt limit in a timely way, I think prospects are improving that we will see much better growth in 2014,” Zandi said.

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