Companies boosted payrolls in December by the most in a year, indicating the U.S. job market had momentum as 2015 came to a close, according to a private report based on payrolls.
The 257,000 increase in employment exceeded the most optimistic forecast of economists surveyed by Bloomberg News and marked the biggest jump since December 2014, figures from the ADP Research Institute in Roseland, New Jersey, showed Jan. 6.
Strides made by the labor market may help to generate faster wage growth this year and accelerate consumer spending, the biggest part of the economy. Labor Department data on Jan.. 8 may show private payrolls climbed by about 198,000 workers in December, in line with an average 202,000 gain in the first 11 months of 2015.
“Strong job growth shows no signs of abating,” Mark Zandi, chief economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, said in a statement. Moody’s produces the figures with ADP. “If this pace of job growth is sustained, which seems likely, the economy will be back to full employment by midyear.”
The median forecast of 39 economists surveyed by Bloomberg called for an advance of 198,000. Estimates ranged from gains of 150,000 to 230,000. The prior month’s figure was revised to 211,000 from a previously reported advance of 217,000.
Goods-producing industries, which include manufacturers and builders, increased headcount by 23,000, the ADP report showed. Hiring in construction climbed by 24,000, while factories added 2,000 jobs.
Payrolls at service providers grew by 234,000.
Companies with 500 or more employees took on an additional 97,000 workers. Medium-size businesses, or those with 50 to 499 employees, increased headcount by 65,000 and small companies added 95,000.
The ADP report is based on data from businesses with almost 24 million workers on their combined payrolls.
Sustained progress in the labor market was among reasons Federal Reserve policymakers in December felt encouraged to raise the benchmark interest rate for the first time in almost a decade.
The December jobs report, to be issued by the Labor Department on Jan. 8, may show hiring remained resilient. Overall payrolls, which include government agencies, may have climbed by around 200,000 workers after rising 211,000 in the prior month, Bloomberg survey projections also showed. The unemployment rate probably held at 5%, the lowest since 2008.