Strong job growth in October and November was one of the main economic factors that led the Federal Reserve to raise rates in December. And according to ADP’s December 2015 National Employment Report, that job growth is not showing any signs of slowing down heading into 2016.
ADP’s report, which is produced in collaboration with Moody’s Analytics and is derived from actual ADP payroll data, showed private sector job gains of 257,000 from November to December.
“Strong job growth shows no signs of abating,” said Mark Zandi, chief economist of Moody's Analytics, “The only industry shedding jobs is energy. If this pace of job growth is sustained, which seems likely, the economy will be back to full employment by mid-year. This is a significant achievement, given that the last time the economy was at full employment was nearly a decade ago.”
December’s job gains were the largest total for any one month in 2015, said Ahu Yildirmaz, VP and head of the ADP Research Institute, who noted that “Overall, the average monthly employment growth was just under 200,000 for the year in contrast to almost 240,000 jobs per month in 2014. Weakness in the energy and manufacturing sectors was mostly responsible for the drop off.”
The news of December’s private sector job gains bodes well for the overall economy, which made major strides in 2015—as indicated by the Fed’s action to close out the year. Fannie Mae reported on Thursday that consumer sentiment rose significantly to end 2015, with chief economist Doug Duncan stating that “Consumers ended the year on an improved note with regard to their income, job security, and overall economic outlook.”
Duncan also noted that “Brightening economic prospects, if sustained, should stimulate demand for homeownership” provided upward pressure on rents and a low housing supply do not hamper affordability.