INDICATOR: December ADP Payroll Estimate and Conference Board Help Wanted Online Index
KEY DATA: ADP: 238,000; Small: 108,000; Medium: 59,000; Large: 71,000/HWOL: up 125,600
IN A NUTSHELL: "If Friday's employment report is anywhere near what the private sector number crunchers think it will be, the economy could be changing gears even faster than I thought."
WHAT IT MEANS: It's a new year and another chance for my optimism to be fulfilled. Last year, tax increases, sequestration and political chaos kept a clearly improving economy from breaking out. Without those restraints, or at least with fewer of them, we should be able to reach what seems to be the mythical strong growth phase sometime during this year. The best sign would be job gains that move toward the 250,000 per month range and that might be coming. ADP estimates that the December private sector payroll gain could be very strong. Interestingly, construction is supposed to be leading the way. My estimate of a roughly 220,000 increase is lower only because I thought the cold weather might have restrained building activity. ADP also found that manufacturing and the service producing segments of the economy added lots of workers. Supporting the view that the Friday report could be good was a solid increase in online help wanted ads. The Conference Boards' survey also indicated that thirty-six states posted increases in openings.