ADP Posits Smaller Jobs Expansion in January

Payroll specialist Automatic Data Processing Inc. kicked off the monthly parade of employment numbers on Wednesday by reporting that the U.S. private sector created a net of 170,000 jobs in January, down from the revised ADP figure for December of 292,000.

Payroll specialist Automatic Data Processing Inc. kicked off the monthly parade of employment numbers on Wednesday by reporting that the U.S. private sector created a net of 170,000 jobs in January, down from the revised ADP figure for December of 292,000. Official U.S. Department of Labor numbers, which are sometimes at variance with ADP, will be out on Friday.

The service sector produced most of the new positions, according to ADP, some 152,000, while manufacturing jobs were up 10,000 and construction eked out a 2,000-job gain. Small- and medium-sized businesses (one to 49 employees and 50 to 499 employees, respectively) created most of the new jobs: 95,000 by small operations and 72,000 by medium-sized operations. Large businesses (over 500 employees) created a miserly net of 3,000 new jobs.

January’s total may be down month-over-month—and December wasn’t quite as great as first reported—but ADP remains optimistic. “Over the last three months, the monthly gains in employment shown in the ADP National Employment Report have averaged 223,000, compared to 163,000 per month over all of 2011,” said Carlos Rodriguez, president and CEO of ADP, in a statement. “This is a positive development that we hope will continue throughout the course of 2012.”

PMI, construction spending see upswings

In its latest Report On Business, published on Wednesday, the Institute for Supply Management said that economic activity in the U.S. manufacturing sector expanded in January for the 30th month in a row, and the that overall economy grew for the 32nd consecutive month. The Purchasing Managers Index registered at 54.1 percent, an increase of 1 percentage point from December’s reading of 53.1 percent, indicating continued expansion in the manufacturing sector (over 50 means expansion).

Nine industries reported growth in January, according to the ISM, including apparel and leather products; petroleum and coal products; machinery; computers and other electronics; transportation equipment; fabricated metal products; paper products; primary metals; and miscellaneous manufacturing. New orders, production and employment were all growing for the U.S. manufacturing sector as a whole, and prices were increasing as well.

Separately, the Census Bureau reported that U.S. construction spending was up in December by 1.5 percent compared with the previous month. The annualized rate of construction spending during December was $816.4 billion. While not precisely healthy, that figure is the highest annualized rate since early 2010.

New mortgage refi proposal detailed

Also on Wednesday, President Obama detailed the mortgage refinance proposal that he mentioned in last week’s State of the Union address. The plan would expand the authority of the Federal Housing Administration enough to enable it to refinance as many as 3.5 million loans, many of which banks won’t currently touch because their mortgage holders are under water. The proposal’s odds of passage through Congress during an acrimonious election year are fairly slim, however, and the president is certain to make an issue of it in the coming months.

In Europe, worries that Portugal wouldn’t be able to persuade investors to pony up for its latest debt offering proved unfounded, as the nation was able to auction its entire offering of 1.5 billion euros’ ($2 billion) worth of three- and six-month securities. In fact, yields were down compared with the Jan. 18 auction, with three-month bills averaging 4.07 percent, down from 4.35 percent last month, while six-month bills averaging 4.46 percent, down from 4.74 percent.

Wall Street was feeling chipper on Wednesday, maybe happy that Facebook finally got around to pulling the trigging on its highly anticipated, big-deal IPO, or perhaps simply relieved by the decent manufacturing data. In any case, the Dow Jones Industrial Average gained 83.55 points, or 0.66 percent, while the S&P 500 was up 0.89 percent and the Nasdaq advanced 1.22 percent.