WASHINGTON (MNI) - The January ADP employment report beat expectations with 192,000 private sector jobs added for the month, and could be an indication that private employment growth is starting to pick up.
"I feel like its 175 [thousand]," Mark Zandi, chief economist at Moody's Analytics said on CNBC immediately after the ADP report was released. He was referencing job growth-per-month as measured by the Bureau of Labor Statistics in its employment report.
Official January jobs data will be published Friday, and the median forecast in a survey of economists by MNI is for private payrolls to increase by 156,000 in January. MNI's median forecast for the ADP report was a 155,000 increase in jobs, while the median forecast for overall job growth in January, including the public sector, is for 160,000 jobs added.
Over the last five months, private job growth in the BLS report has had an average increase of about 160,000 -- which is about 15,000 more than ADP for comparable months -- but with the latest ADP figures, the average moved up about 8,000 to 153,000.
"I feel like it's moved up and I think that will be confirmed on Friday when we get the BLS data, because we will get the benchmark revisions and we know that will be revised up," Zandi said.
The preliminary revisions to the employment report by the BLS in September implied that private payroll growth for 2012 would be revised up by about 450,000 jobs on the year.
While the headline figure was better-than-expected, the December ADP payrolls number was revised down from up 215,000 to up 185,000 which caused some analyst to raise caution.
Andrew Grantham, an economist at CIBC wrote in a research note that the downward revision "largely offsets the upside surprise from the latest number," but added that CIBC is maintaining their above consensus forecast for headline job growth to increase by 188,000 in January.
TD Securities strategist Millan Mulraine was slightly more bullish on the ADP report but maintained a lower forecast for the BLS jobs report.
"The better-than-expected ADP print of 192,000 for private sector employment in January points to some modest upside bias for the current consensus forecast of 168,0000 for private payrolls (161,000 on total payrolls)," Mulraine said in a research note, adding "this was the first time in some time that this has taken place and it is an indication that this segment of the economy is finally beginning to provide a tailwind for growth."
However, Mulraine said TD is also maintaining their below-consensus payrolls forecast for +154,000 jobs added in January.
First Trust was the first and only (so far) of MNI's survey participants to revise their BLS Employment report forecast based on the ADP report, revising their forecast for overall job growth from +145,000 to +160,000 and likewise their forecast for private sector job growth from +150,000 to +165,000.
--MNI Washington Bureau; tel: +1 202-371-2121; email: imckendry@mni-news.com
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