--ADP says private businesses added 192,000 jobs in January
--Decline in large company payrolls may be seasonal swing
--Strong ADP report in "striking contrasts" with weak 4Q GDP data
(Adds comments in paragraphs five through nine and 11.)
By Kathleen Madigan
Private businesses added new employees at a rapid clip in January despite layoffs at the largest U.S. companies, according to a tally of private-sector hiring released Wednesday.
Private-sector jobs in the U.S. increased by 192,000 this month, according to a national employment report calculated by payroll processor Automatic Data Processing Inc. ( ADP ) and forecasting firm Moody's Analytics.
Economists surveyed by Dow Jones Newswires expected ADP to report a gain of 165,000 private jobs. The December job gain was revised down to 185,000 from 215,000 reported a month ago.
According to ADP, firms employing between one and 49 workers increased jobs by 115,000 in January. Medium-sized businesses with payrolls of 50 to 499 workers hired 79,000 new employees. But large firms, businesses with 500 or more employees, cut 2,000 positions.
The drop in large-company payrolls may reflect a problem with seasonally adjusting the data, said Mark Zandi, chief economist at Moody's Analytics which compiles the ADP data.
Adjusting economic data is always difficult at the turn of the year, and Zandi said the ADP declines were centered in the leisure, hospitality and retail sectors where hiring is volatile around the holidays.
Service-sector jobs increased by 177,000 in January, but factory jobs fell by 3,000 slots. Construction payrolls increased 15,000.
"It feels as if the job market is improving," Zandi said. He forecasts the unemployment rate will fall about a half percentage point to stand close to 7% by the end of this year. The unemployment rate was 7.8% in December 2012.
The strong ADP number is in "striking contrast" with Wednesday's report that fourth-quarter U.S. real gross domestic product shrank at an small annual rate of 0.1%, Zandi said. But he said two sources of weakness--inventories and foreign trade--were based on incomplete data and the drag from those sectors could be revised away when more data are available.
The ADP report comes out two days ahead of the Bureau of Labor Statistics' employment situation report. Last month's strong ADP report caused economists and investors to lift their expectations for December payrolls, which include government jobs. Instead, the BLS reported a modest 155,000 new jobs were created last month.
Economists are not changing their Friday forecast. For now, economists surveyed by Dow Jones Newswires expect total nonfarm payrolls increased by 166,000 in January. This month's jobless rate is projected to hold at 7.8%.
ADP, of Roseland, N.J., offers payroll processing, human resource and benefit administration services to about 600,000 clients worldwide. Economics firm Moody's Analytics is a subsidiary of Moody's Corp. (MCO).
Another job-related release out Wednesday reported a smaller number of jobs created this month. TrimTabs Investment Research estimated between 135,000 and 155,000 jobs were added in January.
TrimTabs analyzes daily income tax deposits to the U.S. Treasury to calculate its job estimate. The company said it issued a range of jobs this month because the "bonus shifting in advance of this year's tax hikes makes it much tougher than usual to estimate employment growth."
Write to Kathleen Madigan at kathleen.madigan@dowjones.com
(END) Dow Jones Newswires 01-30-131108ET Copyright (c) 2013 Dow Jones & Company, Inc.
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