US private sector jobs surge after Sandy

The US private sector job creation rose to a 10-month high in December as the labour market saw a bounce in employment mainly due to reconstruction following superstorm Sandy.

Businesses added 215,000 new jobs last month, ADP, the payroll processor, said on Thursday. The report contained a large upward revision to November's numbers which came in at 148,000, from the 118,000 initially reported. Economists had expected a December level of 150,000. Mark Zandi, chief economist of Moody's Analytics, a subsidiary of the rating agency, said: "There was a bounce back in December due to Sandy rebuilding. This was a very good report that shows resilience in the economy, but we are not off and running yet." More News From Financial Times
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Superstorm Sandy weighs on US jobs market The gains were mostly in service sector, which added 187,000 jobs, while the goods-producing sector added 28,000. Employment in construction was particularly strong, gaining 39,000, and offset the 11,000 decline in manufacturing employment. The ADP report is constructed primarily from businesses' electronic payroll records, representing approximately 406,000 US corporate clients and 23m employees - more than 20 per cent of all private sector workers. In the last few months of 2012 companies tightened their pursestrings as they awaited a resolution to the fiscal cliff debate - swooping tax rises and spending cuts that threatened to derail the US economy. Mr Zandi said it was heartening that the uncertainty surrounding the fiscal cliff debate had not done significant damage to the jobs market. "This is positive for the economy as there is more brinkmanship still to come." A separate report by Challenger, Gray & Christmas, the recruitment company, echoed this sentiment and showed employers announced fewer job cuts in December than the month before. Planned job losses fell 43 per cent to 32,556 last month - the lowest since August - from 57,081 in November. "The overall pace of downsizing was at its slowest since the end of the recession. In fact, we have not seen this level of job cutting since before the dot.com collapse and subsequent 2001 recession," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas. The data were released ahead of Friday's employment report from the labour department, which is expected to show that 155,000 jobs were created by government and businesses in November. Separately, a weekly labour department report released Thursday morning showed that first time claims for unemployment insurance rose by 10,000 to a seasonally adjusted 372,000 in the week to December 29, following an upwardly revised level of 362,000 the previous week. Initial jobless claims reflect weekly activity, and tend to fall as jobs growth - measured by the monthly non-farm payrolls report - accelerates.