The U.S. private sector added 192000 jobs in January, according to new estimates from payroll processor, ADP. ADP’s report is partly contributed by Moody’s analytics.
Carlos Rodriguez, the chief executive and president of ADP, shared his insight about the report, noting that private sector employers generated an average of 183,000 jobs each month over the past quarter. He added that this trend was not only encouraging but that it also signaled steady improvement in the job market.
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It was noted that most of the jobs during the month were created by small businesses with less than 50 employees. These businesses added 115,000 jobs ; however, big businesses, with an excess of 500 workers, cut 2,000 jobs during the period.
Moving over to different sectors and industries, it was noted that professional and business services added the most jobs, increasing hires by 40000. The manufacturing sector cut 3,000 positions.
In addition, ADP revised December’s estimate, slashing it from 215,000 to 185000 private jobs. Last month, the government noted that the economy ended 2012 with an additional 155,000 jobs and an unemployment rate of 7.8 percent. The government also added that private employers were responsible for an additional 168,000 jobs while government jobs were reduced by 13,000.
Economists surveyed by Reuters had earlier forecasted a 165,000 gain on jobs; ADP’s forecast trounced on these estimates by close to 30,000. “The job market is slowly, but steadily, improving,” remarked Mark Zandi, chief economist at Moody analytics.
Jefferies maintains underperform rating
Jefferies has maintained an underperform recommendation on ADP. Its negative slant on ADP’s stock is influenced more by secular factors than its cyclical factors. According to Jefferies, secular factors such as increased competition and limited clearance for market penetration weigh heavier compared to cyclical factors. Jefferies however maintains that despite the notable improvement in cyclical factors, the outlook on these factors is still weak in a historical context.