(Kitco News) – The U.S. labor market lost some momentum last month compared to December, but still managed to beat expectations, as private U.S. companies created more than 200,000 jobs according to the latest data released by released by payrolls processor ADP.
Wednesday, ADP reported that 205,000 jobs were created in January, slightly down from December’s massive job growth of 267,000 but still above expectations. Consensus forecasts were calling for gains of around 195,000 jobs.
While there were broad-based employment gains, one glaring trend continues to be weakness in the manufacturing sector, which according to the report created no jobs last month.The manufacturing sector has been steadily losing momentum since the start of the second half of 2015 as a stronger U.S. dollar has made U.S.-produced goods more expensive to export.
Looking at some of the components of the report, small businesses created 79,000 new jobs last month, midsized businesses created 82,000 new positions and large corporations created 44,000 jobs.
In a sector and industry breakdown, the service sector continues to lead the way, creating 192,000 jobs last month. The goods producing sector created 13,000 jobs, the construction industry created 21,000 jobs, the trade transportation and utilities sector created 35,000 new positions, the financial sector created 19,000 new jobs and the professional business sector saw growth of 44,000 jobs.`
Although, ADP’s employment report has never been a great predictor of the government’s official jobs numbers, Paul Ashworth, chief U.S. economist at Capital Economics said the latest reports provides some upside risk to Friday’s nonfarm payrolls. Currently Capital Economics is expecting to see 210,000 jobs were created last month.
“Monthly gains in employment of around 200,000 are pretty impressive in an economy with a 5% unemployment rate. Activity may be suffering a temporary blip, but the labor market is doing fine,” he said.