ADP Employment: Another Strong Report To Start 2018

Bottom Line: ADP's tally of private sector employment showed another month of strong job gains. Gains were particularly strong in service producing industries. ADP data do not account for government workers which are included in the Employment Situation headline number. This would suggest the potential for an upside beat of the 180k consensus for the nonfarm payroll report due Friday. ADP National Employment ROSE by 250k in January, compared with estimates for a gain of 185k. Meanwhile, the revisions to the prior 3 months added an additional 12k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 210k per month, lifting employment to 2.0% ABOVE its year ago level. Jobs in Goods-Producing Industries ROSE by 22k jobs as Manufacturing gained 12k workers. Moreover, Construction gained 9k jobs. Meanwhile, Service-Producing Industries ROSE by 212k jobs with Professional/Business Services hiring 46k workers, Trade/Transport/Utilities adding 51k, and Financial Activities increasing by 16k workers. Small Firms hired 58k workers, Medium-Sized Firms grew by 91k employees while Large Firms added 85k positions.