As the millions of unemployed and underemployed can tell you, the one area of the economy that has been slow or even failed to recover is the labor market, even as other indicators have improved significantly. Politicians and economists have been scrambling to find solutions, but there are reasons to be optimistic that meaningful job growth is just around the corner.
ADP A-OK
The ADP Employment Report was released yesterday and it showed that employment rose by 93,000 in November which was the highest since November of 2007. The October number was revised up significantly as well. This doesn’t sound like a lot of jobs created, but ADP has routinely been on the pessimistic side, so I think we will see even better growth in the granddaddy of employment reports due out this Friday.
Expectations are running at around 140,000 jobs to be created on Friday, but given the current data, I wouldn’t be surprised to see a strong upside to that number. The reason is that the service sector has been very healthy and comprises a vast majority of the private sector jobs. Get the service sector going and the jobs engine will really start to rev up.
Another area of optimism that I haven’t heard a lot of talk about is productivity growth. Productivity measures output per hour and is essential for the long-term growth in living standards. However, if productivity is too high, employers don’t have the need to hire more workers since the existing workers are so effective in getting the job done. The government recently reported that productivity growth grew 2.3% in the September quarter which was above expectations. So what is the good news?
This is well below the 3.5% rate in 2009, which indicates that employers will need to start hiring on a much larger scale in the near future. As GDP grows further, it will be impossible for the existing workforce to do all the work to meet increased demand. As profit-maximizing entities, corporations must take on more people to complete the additional work.
I think we will be seeing 150,000-200,000 jobs being added monthly in the near future. That is great news for the economy and those people waiting for the economy to turn so they can get back to work. Their time is at long last coming soon.
Coming Soon to a Market Near You: Job Growth is an article from: 
