Private payroll growth surges in December to end 2019 strong, ADP says

Key Points
  • Private payrolls rose by 202,000 in December vs. the 150,000 estimate, according to ADP and Moody's Analytics.
  • The report comes ahead of Friday's government nonfarm payrolls release, which is expected to show an addition of 160,000 jobs.
  • Job growth came from construction and across a spectrum of service-related industries.
Recruiters and job seekers are seen at a job fair.
Rick Wilking | Reuters

Private payroll growth ended 2019 on a strong note, with companies adding 202,000 positions in December in another sign of a healthy labor market, according to a report Wednesday from ADP and Moody's Analytics.

The total was well above the 150,000 consensus estimate from economists surveyed by Dow Jones and sets the stage for the government's official count that will be released Friday. Economists expect the Labor Department's tally to show a gain of 160,000.

In addition to the solid December growth, ADP revised the initial November count of 67,000 up to 124,000.

Despite the big beat in December, the jobs market continues to "moderate," said Mark Zandi, chief economist at Moody's Analytics.

"Manufacturers, energy producers and small companies have been shedding jobs. Unemployment is low, but will begin to rise if job growth slows much further," Zandi said in a statement.

Job gains for the month were spread across sectors, with construction adding 37,000, the best monthly gain since April and a reversal of the initially reported 5,600 loss in November.

Goods-producing industries added 29,000 after dropping 17,600 a month ago. Manufacturing saw a decline of 7,000 while natural resources and mining fell by 1,000.

Services added 173,000, led by 78,000 in trade, transportation and utilities and 61,000 in professional and business services. Education and health services rose by 49,000 and financial activities contributed 10,000.

On the negative side, leisure and hospitality, one of the biggest growth sectors during the decade-old economic expansion, lost 21,000 positions while information services posted a 14,000 drop.

Counting by company sizes, businesses employing 50 to 499 workers led the way with 88,000 new jobs, while small firms added 69,000 and large companies rose by 45,000.

The ADP count tees up the Labor Department's official tally, though the two counts can vary widely on a monthly basis. In November, ADP's initial reading of 67,000 sharply trailed the government's estimate of 266,000.

However, over time the two numbers often mesh. For all of 2019, ADP's count averaged 163,000 a month, while the Labor Department was at 166,000 through November.