The most exciting news of last week came on the employment front. On Thursday, ADP reported that private-sector payrolls rose by 325,000 jobs in December, far above economists’ consensus estimate of 175,000 and the biggest monthly increase since January 2001! ADP reported that small and mid-size firms created 288,000 (89%) of those new jobs, and the service sector created 273,000 (84%) of new jobs.
In another jobs-related report, the U.S. Labor Department reported that the latest weekly jobless claims declined 15,000 to 372,000, and the four-week moving average fell by 3,250 to 373,250, the lowest level since June 2008. Weekly jobless claims have now been below 400,000 in eight of the last nine weeks.
For confirmation of this trend, the Labor Department reported on Friday that December payrolls rose by 200,000, well above the economists’ consensus estimate of 150,000. The private sector created 212,000 payroll jobs. Also, the unemployment rate unexpectedly fell to 8.5% — down from a revised 8.7% in November.
In addition, the broader household survey reported 297,000 new jobs. Put the three reports together and we come up with 212,000 to 325,000 new private-sector jobs in December, the best month in years.
Other indicators are also looking up. Last Tuesday, the Commerce Department reported that new orders for manufactured goods rose 1.8% to $459.2 billion, which bodes well for fourth-quarter GDP growth.
Also, last Tuesday, the Institute for Supply Management announced that its manufacturing index rose to 53.9 in December, up from 52.7 in November — above economists’ consensus expectations of 53. The new orders index rose to 57.6 from 56.7 in November, while the ISM factory employment index surged to 55.1 in December — up from 51.8 in November. All these numbers reflected six-month highs.
The consumer side of demand also is looking very positive. It looks as if holiday shoppers reacted a lot more positively to aggressive promotions — generating record Black Friday sales — than we had once thought. On Thursday, the International Council of Shopping Centers (a trade group) raised its December retail sales forecast to 4.5% — up from its previous forecast of 4%.
Also on Thursday, it was announced that December vehicle sales were outstanding, led by Chrysler (up 37%), Volkswagen (PINK:VLKAY) (up 36%), Nissan (PINK:NSANY) (up 10.7%), Ford (NYSE:F) (up 10%) and General Motors (NYSE:GM) (up 5%). For all of 2011, total Big 3 vehicle sales rose an astounding 26% for Chrysler, 17% for Ford and 14% for GM.
