Economists cautiously hopeful ahead of monthly jobs data
ADP private payroll data points to an encouraging trend in service-related jobs that are key to economic growth.
Wall Street will be watching closely today as the government releases its employment numbers for December. Already, there have been some encouraging hints from a private-sector survey released by payroll processing firm ADP.
Service industries were the biggest driver behind ADP's estimated increase of 215,000 private-sector jobs. That's a solid number overall, says economist Joel Naroff, but he points to a significant pick-up in construction, retail and other service-related jobs as an especially good sign.
"That tells me that the recovery is really broadening," Naroff says, "and it sets the stage for a lot better growth as we go through this year."
At Pantheon Macroeconomic Advisors, chief economist Ian Shepherdson takes a more cautious view. He notes that stores traditionally bring on extra help for the holidays, and adds that there's no guarantee such seasonal hiring signals a trend.
"I'm really quite nervous that that's not going to be sustained once the payroll tax increase kicks in and retail spending presumably starts to suffer again," Shepherdson explains.
Another concern: Could hiring take a hit from a dip in manufacturing activity? Naroff maintains his optimism:
"Once consumers get their legs back and they stop fearing the 'fiscal cliff' and they start spending more, then we'll start seeing manufacturing pick up," he predicts.
If that happens, Naroff says there could be even stronger job growth ahead.