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ADP Employment: 800+k, 2x Expectations

January 5, 2022
Bottom Line:   ADP reported stronger than expected job gains in December for the fourth month in a row; this time nearly double expectations. Servicing producing companies drove the surprise, though goods producers continued to hire at a robust pace. Trade/transportation/utility jobs saw their biggest job gains in over a year as intermediary companies continued to hire to alleviate supply bottlenecks. Leisure and hospitality hiring was notably higher at 246k, nearly double the November gains as the initial impact of the omicron variant had minimal impact on consumers' mobility. On a trend basis, this report shows accelerating job creation into year-end with the three-months ended in December running at an average of 625k per month, above the six-month pace of 505k and the 12-month pace of 514k.  Moreover, this report suggests upside risk to the consensus forecast of 424k for nonfarm payroll growth on Friday.
ADP National Employment ROSE by 807k in December, compared with the consensus estimate for a gain of 410k. Meanwhile, the revisions to the prior 3 months subtracted an additional 36k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 514k per month, lifting employment to 5.2% ABOVE its year-ago level.
Jobs in Goods-Producing Industries
ROSE by 138k jobs but Manufacturing gained 74k workers. Moreover, Construction gained 62k jobs.  Meanwhile, Service-Producing Industries ROSE by 669k jobs with Professional/Business Serviceshiring 130k workers, Trade/Transport/Utilities adding 138k, and Financial Activities increasing by 24k workers.
Small Firms hired 204k workers, Medium-Sized Firms grew by 215k employees while Large Firms added 389k positions.