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Hiring up in December, but analyst predicts it may be short lived

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December private-sector employment data released today by Roseland-based Automatic Data Processing showed an unexpected bright spot in national hiring activity, as the U.S. economy added 215,000 jobs last month — though an economist doesn't expect that upbeat pace to last through January.

“This number is strong, but I don’t think the trend for the level of job creation has improved … and I don’t think we’re out of the woods here yet,” said Mark Zandi, chief economist for Moody’s Analytics, which co-authors the monthly report with ADP. “We’ve been getting about 150,000 new jobs per month fairly consistently over the past few years, and I think job creation will be around that number for the next few months ahead.”

According to the report, the construction sector added 39,000 jobs in December, which Zandi attributed to continued recovery efforts following Hurricane Sandy. But Zandi said the industry’s employment outlook is “very encouraging for the next several years,” as he expects residential and commercial construction activity across the country to significantly improve.

Though Zandi said construction-related establishments are typically small, companies with less than 50 employees reported a modest payroll increase of 25,000 jobs in December, compared to 87,000 jobs added at large corporations and 102,000 jobs created at midsized businesses.

“Small businesses have been struggling all along during the recovery since it began and since job growth resumed, and part of the reason is construction activity is very important to small companies — and it has lagged, until recently,” Zandi said. “With the burst of job growth in construction in the month of December, we should have seen better employment conditions on the small-business side. I don’t know why it didn’t show up, but I think we’ll see gains for small businesses in the months ahead, if I’m right about construction continuing to pick up.”

Zandi said the positive December employment data show fiscal uncertainty at the national level has not yet made any significant impact on employers’ hiring decisions, though “I don’t think the number signals that we’re off and running … and we won’t start to see stronger job growth on a consistent basis for some time, as there’s more brinkmanship on uncertainty to come.”

According to the report, the trade, transportation and utilities sector drove private-sector employment growth last month by adding 53,000 jobs, though the manufacturing sector slightly weighed down gains by shedding 11,000 jobs. ADP’s November employment report was revised upward to 148,000 jobs, from the 118,000 jobs it originally reported.

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