In November, the ADP survey of US private sector employment recorded a gain of 206 000 jobs. The market was expecting a rise of 130 000. In addition, the October reading was revised higher from an initial estimate of +110 000 to +130 000. The latest private sector employment reading is the highest since 2006.
This is excellent news as we look ahead to the overall November jobs report that is scheduled for release on Friday (2 December). The market is currently expecting a gain of 122 000 in total US employment, comprising a gain of 146 000 in the private sector and a loss of 24 000 jobs in government. I expect these estimates will be revised higher in the next two days.
A gain of 200 000 private sector jobs is very encouraging from an economic growth perspective and, together with a broad range of improved US economic data, significantly reduces the chances of a return to recession conditions in the US. All eyes remain on Europe on their build-up to the crucial 9 December summit.
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