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Economic Snapshot: Private sector employment adds 153,000 jobs

By Brianna Liestman

The ADP Employment Report, which tracks private sector employment, shows 153,000 jobs were added in December. Monthly averages of private sector employment are down by 35,000 from 2015.

ADP employment

Private sector employment increased by 153,000 jobs in December, which is down significantly from the 215,000 jobs added in November.

“As we exit 2016, it’s interesting to note that the private sector generated an average of 174,000 jobs per month, down from 209,000 in 2015,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute.

Medium businesses contributed the highest number of jobs in December at 71,000 new jobs, with large businesses not far behind at 63,000. Small businesses added 18,000 jobs.

Service-producing employment added 169,000 jobs in December. Professional/business services added 24,000 jobs and financial activities added 10,000 jobs. Trade/transportation/utilities had a big month, adding 82,000 jobs.

Goods-producing employment lost 16,000 jobs in December. Construction lost 2,000 jobs and manufacturing lost 9,000.

“While job gains in December were slightly below our monthly average, the U.S. labor market has experienced unprecedented seven years of growth that has brought us to near full employment,” added Yildirmaz. “As we enter 2017, the tightening labor market will likely slow the growth.”

ISM manufacturing

The ISM Manufacturing Index registered 54.7 percent in December, an increase of 1.5 percentage points from the November reading of 53.2 percent. Economic activity in the manufacturing sector expanded in December and the overall economy grew for the 91st consecutive month.

The New Orders Index registered 60.2 percent, an increase of 7.2 percentage points from the November reading of 53 percent. The Production Index registered 60.3 percent, 4.3 percentage points higher than the November reading of 56 percent.

The Employment Index registered 53.1 percent, an increase of 0.8 percentage points from the November reading of 52.3 percent. Inventories of raw materials registered 47 percent, a decrease of 2 percentage points from the November reading of 49 percent. The Prices Index registered 65.5 percent in December, an increase of 11 percentage points from the November reading of 54.5 percent, indicating higher raw materials prices for the 10th consecutive month.

Eleven of the 18 manufacturing industries reported growth in December, six reported contraction and one remained flat.

ISM non-manufacturing

The ISM Non-Manufacturing Index registered 57.2 percent in December, matching November’s figure. This represented continued growth in the non-manufacturing sector at the same rate. Economic activity in the non-manufacturing sector grew in December for the 83rd consecutive month.

The Business Activity Index decreased 0.3 percentage points to 61.4 in December, reflecting growth for the 89th consecutive month at a slightly slower rate. The New Orders Index registered 61.6 percent, 4.6 percentage points higher than the reading of 57.0 in November.

The Employment Index decreased 4.4 percentage points to 53.8 in December. The Prices Index increased 0.7 percentage points from the November reading of 56.3 percent to 57.0 percent, indicating prices increased in December for the ninth consecutive month at a slightly faster rate.

Twelve of the non-manufacturing industries reported growth in December and three reported contraction.

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