Did the private sector really add more than 800,000 jobs in December even as the omicron variant pushed new Covid-19 infections toward record highs?
That’s what payroll processor ADP said Wednesday in its monthly National Employment Report. According to ADP, private employers added 807,000 new positions in December, more than twice the median forecast of Wall Street analysts.
There’s reason for doubt, however, that the figure will be reflected in the government’s official jobs data released Friday. Through much of the pandemic, the ADP report was a highly unreliable predictor of the official employment statistics, although its defenders say it was not bad compared with other forecasts.
That’s likely because the Chinese coronavirus has had wildly volatile effects on the economy, with little historical precedent to inform predictive models.
For what it’s worth, ADP said that job gains were widespread. Services jobs grew by 669,000 and good-producing jobs grew by 138,000.
Within services, leisure and hospitality led with 246,000. Trade, transportation, and utilities added 138,000. Professional and business services jobs grew by by 130,000. Education and health services added 85,000. Information added a relatively weak 12,000 and finance added 24,000.
Within the goods-producing sector, manufacturing jumped by a very strong 74,000 and construction added 62,000.
Large businesses led the way, according to ADP, adding 389,000. But midsized and smaller businesses contributed impressively, adding 214,000 and 204,000 jobs respectively.
Why didn’t omicron have a bigger effect?
It might all be timing. The ADP report, like the government’s employment situation report, is based on data collected through the middle of December, when the omicron outbreak was not as widespread.
“December’s job market strengthened as the fallout from the Delta variant faded and Omicron’s impact had yet to be seen,” said Nela Richardson, ADP’s chief economist.
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