I have been saying for weeks that December would prove to be a very positive month from a GDP and jobs standpoint. Tomorrow we’ll get the official unemployment statistics from the BLS. But ADP released its private employment survey today, and it shows private sector employment up 325,000. That would be consistent with a drop in the unemployment rate, unless the labor participation rate rose significantly. It’s double the consensus from economists.
The ADP survey has not always correlated with the BLS report; last month, ADP showed 204,000 private jobs created, more than BLS, for example. And ADP only surveys private employers. The public sector has decreased by an average of 24,000 a month, so we can expect that to continue to drag on total employment. So this does not really portend a great BLS report.
But the first-time jobless numbers correlate with a good report as well. The four-week moving average has consistently been below 400,000, and last week claims dropped to 372,000. The current four-week average is the lowest since June 2008. The data is primed for a very good report tomorrow.
And if increased revenues stem the losses to the public sector, the removal of that fiscal drag would help the economy to a decent degree. And of course, we have the payroll tax cut still in place, at least until the end of February.
Obviously there are still headwinds, and we’ll have to see if this 4th-quarter recovery had more to do with short-term changes in inventories or a real shift in the fundamentals. But December will wrap up nicely. Let’s hope that portends good news for the jobless in the future.