Private sector employers stepped up their hiring in December despite the looming budget crisis. This was one of the signs of the strength of the nation’s economy at the end of 2012. Other data showed an increase in the number of Americans filing for new unemployment benefit claims but job growth remained steady.
Congress approved a deal that averted the fiscal cliff, which is a combination of tax increases and large government spending cuts that could have cost the nation around $600 billion. But even with the measure in place, the budget problems are far from over.
The ADP National Employment Report indicated the private sector added 215,000 jobs in December after an increase of 148,000 in the previous month. The report is developed with Moody’s Analytics. The increase in jobs came despite the worries about the fiscal cliff.
The ADP data tends to overstate job gains in December due to a year-end accounting oddity. Economists tend to be cautious about it but are encouraged by the by the positive numbers. Data on consumer spending and manufacturing suggested the economy was in better shape than the initial reports.
Government’s more comprehensive employment report will be released Friday. The report is expected to show employers added 150,000 jobs in December. A poll of economists by Reuters showed an addition of 146,000 in November.
After the release of the ADP report, prices for US Treasury debt dropped. The dollar gained while stocks on Wall Street remained steady after the recent rally.
A report from the Labor Department showed primary claims for state unemployment benefits increased 10,000 to a seasonally adjusted 372,000. Claims for nine states were only estimates because of the Christmas and New Year holidays.
The four week moving average for new claims was slightly changed at 360,000. This indicates that labor conditions continue to improve at a steady rate.