"Job growth meaningfully accelerated and is now over 200,000 per month. Job gains are broad-based across industries, most notably in construction and manufacturing. It appears that businesses are growing more confident and increasing their hiring"
- Mark Zandi, chief economist at Moody's Analytics
As usual a report from the ADP gives a first insight into the official labour market report due on Friday. Analysts expected payrolls to fall following November's strong gain; however, a surprise jump in private sector hiring is bolstering the case the Fed can trim down its monthly purchases at a faster pace than previously was thought.
The Automatic Data Processing said the U.S. private sector added 238,000 jobs in December, posting the biggest gain since November 2012, and climbing higher from November's 229,000 figure that was revised up. The median projection, however, called for a 200,000 increase. Moreover, the level is strongly higher than the average monthly gain of 168,000 during the rest of 2013.
A pickup in hiring coupled with higher wages are helping to boost consumer spending, which make up almost 70% of the world's largest economy. During the second half of 2013 the economy registered strongest growth since 2005. The third-quarter GDP has been upwardly revised to 3.6%, while official figures will unveil the fourth-quarter GDP on January 30, the latest trends in employment are adding to signs it can surprise markets to the upside as well, hence, a fall in EUR/USD can last longer and bears may push it even to a 200-day SMA, which is just slightly above 1.33.
© Dukascopy Bank SA