ADP numbers show US job market growth despite government shutdown

ADP’s report suggests that the government shutdown and argument over raising the debt ceiling had little impact on hiring. Photograph: Getty Images

The US job market remained “surprisingly resilient” through the government shutdown, adding 215,000 new positions in November, payroll processor ADP said Wednesday.

The latest figures from the payroll giant are the strongest it has reported this year. They come ahead of the government’s own monthly jobs report on Friday, a key economic indicator being closely watched by the Federal Reserve as it considers cuts to its $85bn a month economic stimulus programme.

Economist had forecast ADP would announce a monthly increase of around 173,000. ADP also revised its October number up to 184,000 from an initially reported 130,000.

ADP’s report suggests fears that despite fears to the contrary the government shutdown and argument over raising the debt ceiling had little impact on hiring. Jobs growth through the month was broad-based with small business, seen as the main engine of hiring, adding 102,000, the largest increase by sector.

Goods-producing companies added 40,000 jobs in November, up from 29,000 in October.

Both construction and manufacturing payrolls added 18,000 jobs apiece. The gain for manufacturing was the largest since early 2012. Service industries added 176,000 jobs in November, the largest gain in a year and up from 156,000 in October.

Mark Zandi, chief economist of Moody’s Analytics, which helps compile the report, said: "The job market remained surprisingly resilient to the government shutdown and brinkmanship over the treasury debt limit. Employers across all industries and company sizes looked through the political battle in Washington. If anything, job growth appears to be picking up.”

Carlos Rodriguez, president and chief executive officer of ADP, said: “It’s an encouraging sign as we head toward the new year.”

Friday’s nonfarm payroll figures from the Labor Department are the last before the Fed meets mid December to discuss trimming the so-called quantitative easing programme. The Fed has clearly signaled that the programme will be cut if and when the jobs market appears more firmly recovered.

Last month the US announced it had added 204,000 new jobs in October, higher than expected. Figures for August and September were also revised upward. Economists are predicting that the US added around 185,000 new jobs in November.

If the government figures tally with ADP, the likelihood of a cut in QE will increase. “Consistent job growth of around 175,000 to 200,000 per month makes it likely that the Federal Open Market Committee will start to reduce its purchases of $85bn per month of long-term treasuries and mortgage-backed securities at its late January meeting,” PNC Bank said in a note to investors.