Economic Snapshot: Private sector employment soars in January

The ADP Employment Report showed private sector employment was up significantly in January than in the past seven months. Construction and manufacturing jobs rose this month, in contrast to regular losses throughout 2016.

ADP employment report

Private sector employment increased by 246,000 jobs in January 2017. This is a nearly 100,000-job jump from the 151,000 jobs added in December 2016 and the highest number of jobs added since last June.

Medium businesses increased by 102,000 jobs, large business increased by 83,000 jobs and small businesses increased by 62,000 jobs.

Service-producing employment added 201,000 jobs in January. Professional/business services added 71,000 jobs and trade/transportation/utilities added 63,000 jobs. Financial activates neither added nor lost jobs in January.

Goods-producing employment added 46,000 jobs. The construction segment added 25,000 jobs and manufacturing added 15,000 jobs; both segments lost jobs in December, and January’s gains more than make up for those losses.

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Consumer confidence

Consumer confidence retreated in January, now standing at 111.8. This is down from 113.3 in December.

The Present Situation Index increased from 123.5 to 129.7 but the Expectations Index decreased from 106.4 to 99.8.

Consumers who say business conditions are “good” increased slightly from 28.6 percent to 29.3 percent and those saying business conditions are “bad” decreased from 17.8 percent to 16.1 percent. The percentage of consumers stating jobs are “plentiful” rose from 26.9 percent to 27.4 percent and those claiming jobs are “hard to get” decreased from 22.7 percent to 21.5 percent.

Consumers’ short-term outlook, which had increased considerably last month, declined in January. The percentage of consumers expecting business conditions to improve over the next six months decreased from 24.7 percent to 23.1 percent and those expecting business conditions to worsen increased from 8.9 percent to 10.7 percent.

The proportion of consumers expecting more jobs in the months ahead decreased from 21.7 percent to 19.8 percent and those anticipating fewer jobs was virtually unchanged at 14.0 percent. The percentage of consumers expecting their incomes to increase declined from 21.5 percent to 18.0 percent and the proportion expecting a decrease rose from 8.6 percent to 9.6 percent.

GDP

Real gross domestic product increased at an annual rate of 1.9 percent in the fourth quarter of 2016, according to the “advance” estimate released by the Bureau of Economic Analysis. In the third quarter, real GDP increased 3.5 percent.

The increase in real GDP in the fourth quarter reflected positive contributions from personal consumption expenditures, private inventory investment, residential fixed investment, nonresidential fixed investment, and state and local government spending. These were partly offset by negative contributions from exports and federal government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The bureau emphasized that the fourth-quarter advance estimate is based on source data that are incomplete or subject to further revision by the source agency. The "second" estimate for the fourth quarter, based on more complete data, will be released on Feb. 28.

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