The numbers: Private-sector employment was strong for the second straight month in January, as employers added 234,000 jobs, Automatic Data Processing Inc. reported Wednesday. Economists had expected an increase of 185,000 private-sector jobs, compared with December estimate of a gain of 250,000.
What happened: Details of ADP’s report showed that small private-sector businesses added 58,000 jobs in January, medium-sized businesses added 91,000 and large businesses added 85,000.
Big picture: Economists use ADP’s data to get a feeling for the Labor Department’s employment report, which will be released Friday and covers government jobs in addition to the private sector. But lately, ADP has been volatile. The firm’s estimate for December private payrolls was 104,000 more than the government data showed.
Economists think the trend in job growth will slow over time as the labor market has tightened, but that slowdown won’t show up yet. Economists polled by MarketWatch expect the government’s report, to be released on Friday, to show that nonfarm payroll jobs jumped by 185,000 after rising by 148,000 in December.
What they are saying?: Mark Zandi, chief economist for Moody’s Analytics, said on CNBC that the data show the labor market is “excruciatingly tight.” He predicted the unemployment rate would drop from 4.1% into the mid 3% range.
Stock futures held their already solid gains in the wake of the release. The Dow industrials
looked to stabilize after a two-day bruising that wiped out some 500 points from the average. The benchmark 10-year Treasury yield
remained lower after the data, though remain above 2.7%.