ADP Blows the December Jobs Estimate

On January 4, ADP Employer Services announced that the US economy added 297,000 jobs in December. Most economists had estimated 100,000 jobs were added. The US Bureau of Labor Statistics will announce the “official” number on January 7. (Which is almost always revised about a month later.)

As consumer spending accounts for about 70% of the US economy, any significant increase in jobs is a positive sign that the economy is improving.

So, did the US really add 297,000 jobs in December? The answer is absolutely not. Best guess is that the US added about half that many jobs in December and the December numbers can always be misleading. How many of the December jobs were retail sales positions that will only last through Christmas? If you are looking for work, even a temporary job is better than no job, but to suggest that temporary seasonal jobs are evidence that the economy is improving is nonsense.

And remember, we need to add 120,000 jobs every month just to keep up with population growth.

Michael Baumer


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by Michael Baumer