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US ADP payrolls beat expectations in January

By Sean Farrell

Date: Wednesday 03 Feb 2021

LONDON (ShareCast) - (Sharecast News) - US private sector employment rebounded more strongly than expected in January as restrictions on businesses were eased, a survey showed.
Non-farm employment rose by 174,000, the ADP National Employment Report showed. Figures for December were revised to show a reduction of 78,000 jobs compared with an initial estimate of 123,000 jobs lost.

The average economist's forecast was for a 49,000 increase in the ADP survey in January. Ian Shepherdson, chief economist at Pantheon Macroeconomics, said "noise" in the data suggested recent payroll trends were flat.

Shepherdson said: "The initial reopening in some states ought to provide a modest lift to payrolls in February, with bigger gains likely from March onwards, assuming the vaccination rollout continues to gather pace and the more infectious UK variant does not force states into keeping restrictions in place for longer. We're more confident about the former than the latter."

He said ADP had been a decent guide to official payroll numbers and predicted the Bureau of Labour Statistics would post an increase of about 200,000 in non-farm payrolls on Friday. A Reuters poll of economists found the average forecast was for official figures to show 50,000 new jobs in January.

Job growth should be supported in coming months by almost $900bn of extra government crisis relief approved in late December and President Biden's proposed $1.9 trn recovery plan.