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ADP: Businesses added 257,000 jobs in December

Paul Davidson
USA TODAY
Businesses have added jobs at a solid pace this year as a healthy service sector more than offset struggling manufacturers and oil producers.

Businesses added a better-than-expected 257,000 jobs in December, payroll processor ADP said Wednesday, in a possible sign that the government this week will report a third straight month of healthy employment gains.

Economists surveyed by Bloomberg estimated ADP would tally 192,000 payroll advances. They project the Labor Department's survey of the private and public sector, due Friday, will record 200,000 new jobs.

Some economists expected strong gains in December, in part because they believe unusually warm weather was likely to goose job growth.

ADP's figures often differ significantly from Labor's initial private-sector estimates, and the two counts have varied by an average 52,000 a month over the past year, according to an analysis by High Frequency Economics.

The gaps have been particularly wide in December because ADP's total reflects the tendency of many businesses to drop employees who have left the company from payrolls at year-end. Labor, by contrast, removes those workers from their count when they're no longer paid, the research firm says.

Yet both reports generally have depicted a solid labor market in 2015, with Labor reporting an average 210,000 monthly gains through November.

In December, ADP said, large businesses added 97,000 jobs, midsize ones, 65,000, and small businesses, 95,000.

Professional and business services led the gains, adding 66,,000 jobs. Trade, transportation and utilities added 38,000 and construction, 24,000. Manufacturers -- still hit by a strong dollar, weakness overseas and oil prices—added 2,000.

""If this pace of job growth is sustained, which seems likely, the economy will be back to full employment by mid-year. said Mark Zandi, chief economist of Moody's Analytics, which helps ADP compile the report.

The labor market's sturdy performance helped convince the Federal Reserve to raise interest rates last month for the first time in nearly a decade.

A sharp pullback in hiring would raise concerns that a rising dollar, weak global growth and the struggles of oil companies and manufacturers are starting to take a bigger toll on the U.S. economy. So far, those headwinds have been more than offset by solid consumer spending, an accelerating housing recovery and a vibrant service sector.

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