"The ADP employment report has been susceptible to large swings in December that we think may be in part due to a year-end quirk that has tended to result in ADP printing high relative to payrolls in the final month of the year", said John Ryding, chief economist at RDQ Economics in NY. That would be up from 155,000 jobs added in November yet shy of the 206,000 average pace in the first 11 months of the year.
Data out this week have fanned fears that the nine-year economic expansion is running out of steam.
"The drop in stock prices likely will depress the numbers somewhat over the next couple of months, but for now all the indicators of labour demand we follow are very robust", said Ian Sheperdson, chief economist at Pantheon Macroeconomics.
"The labor market is very strong even though the economy appears to be slowing", said Eric Winograd, senior US economist at the investment management firm AllianceBernstein.
A strong employment report could offer some relief to global markets, which have reeled in recent months from a flood of concerns including slowing economic growth.
Morgan Stanley - 167,000 jobs, 3.7 percent unemployment, 3.1 percent annual wage growth. That lifted the annual increase in wages to 3.2 percent, matching October's rise, which was the largest in 9-1/2 years. A month earlier, wages grew 0.2 percent. The average workweek increased to 34.5 hours in December from 34.4 hours in November.
The number of Americans filing applications for new unemployment benefits rose by more than expected last week, but remained at a low level indicative of a tight labor market. Fewer workers worked part-time for economic reasons in December.
"Overall, the markets may have decided the Fed's work is done, but the economic data say otherwise", said Ashworth.
The US central bank raised interest rates four times in 2018.
The report eases fears that the US job market might be headed for a slowdown. Continuing claims, which are reported with a one-week lag, rose to the highest since late July. The U.S. dollar turned positive against a basket of currencies.
In the USA, consumers did not hold back this holiday season, with sales up 5.1 percent over past year, according to a Mastercard report. For the year, those jobs have increased by 241,000. The Labor Department has not been affected by the partial shutdown of the USA government and will continue to publish economic data complied by its statistics agency, the Bureau of Labor Statistics.
Growth forecasts for the fourth quarter are around a 2.6 percent annualized rate, with risks tilted to the downside amid fading stimulus from the Trump administration's $1.5 trillion tax cut package, a trade war with China and policy uncertainty in Washington. "There is growing concern that the economy will slowdown significantly 2019". It needs to create roughly 100,000 jobs per month to keep up with growth in the working-age population.
It is expected to slow to around 150,000 per month this year as workers become more scarce.
The ADP report has a spotty record predicting the private-payrolls component of the government's employment report and last month's surge probably exaggerates the strength of the labor market because of a seasonal quirk. Employment at construction sites rebounded last month, with companies hiring 38,000 employees after adding no workers in November.
Data this week showed factory activity weakened across much of Europe and Asia in December, with Chinese manufacturing contracting for the first time in 19 months. Retailers hired 23,800 more workers.
Jobs in health care increased by 50,000 last month, with most of the employment centered around ambulatory care and hospitals. Employment in the leisure and hospitality sector increased by 55,000 jobs.
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The health and education sector added 82,000 positions. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy.