Small business hiring lifts US private payrolls

An increase in hiring at small businesses helped US companies add more workers than expected in December, offering hope that the labor market recovery is stabilizing.

The ADP national employment report said on Wednesday that the private sector added 187,000 jobs in December, down from a revised 247,000 the prior month. The increase was larger than Wall Street analysts projected, with gains across most industries.

ADP said the report reflected “solid growth of private non-farm payroll employment heading into the New Year” and noted that businesses added 217,000 jobs a month during the last six months. That was a marked improvement from the prior six months, when businesses added 52,000 workers.

The December gains were broad-based. The services sector added 166,000 positions and businesses that produce goods added 21,000.

Small and medium-sized businesses hired the most, adding 97,000 and 79,000 jobs respectively. Big companies hired 11,000 workers.

Wednesday’s figures follow strong manufacturing data earlier in the week that showed hiring in the manufacturing sector growing at the fastest rate since 2004.

On Friday, the US government will release its official non-farm payrolls report, which is expected to show the US economy adding 142,000 jobs and the unemployment rate ticking up to 9.5 per cent. Some economists are wary that severe winter weather will skew the data, as workers were forced to stay at home because of snow.

“The ADP data this morning may prompt an upward revision to Friday’s non-farm payrolls expectations, but sustained improvement in the unemployment rate is still months away,” said Michael Woolfolk, analyst at BNY Mellon Global Markets.