The November job survey released Wednesday by ADP showed a surprising 189,000 private-sector job expansion, with strength in the service sector. Economists had been expecting non-farm payrolls, which is released Friday and which include both private- and public-sector jobs, to have grown about 60,000 in November. Adding an estimated 25,000 public-sector jobs pegs non-farm payrolls for November at a far higher-than-expected 214,000. The ADP survey is considered by many to be the single best predictor of the government's non-farm payroll report, which may in turn call into question whether the Federal Reserve is likely to cut interest rates by 0.50% next week, as the markets now predict (full story).
Joel Prakken, chairman of Macroeconomics Advisers, the firm that computes the ADP index, said Wall Street economists may be taking too pessimistic a stance, given the new data. The service sector produced 197,000 jobs during the month; goods-producing jobs fell by 8,000; and manufacturing jobs fell 5,000. "It's time for the people who are telling this recession story to put up or shut up in terms of the data," economist Robert Stein said. "If you look at the labor market, if you look at consumption, nothing is falling off a cliff in the way you generally see at the beginning of a recession."
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