U.S. private sector payrolls rose by the biggest amount in three years in November, lifting optimism about the job market ahead of Friday’s key employment report, while manufacturing data showed growth was intact.
U.S. private employers added a stronger-than-forecast 93,000 jobs in November, the biggest rise since November 2007, after an upwardly revised gain of 82,000 the month before, data by ADP Employer Services, which jointly developed the report with Macroeconomic Advisers LLC, showed Wednesday.
In a separate report, the Institute for Supply Management said its index of national factory activity dipped to 56.6 last month from 56.9 in October, in line with expectations and well above the 50 level which indicates expansion.
The report also showed employment plans were steady with the prior month.
The labor market has been among the weakest parts of the U.S. economy, and economists see gains in that area as strong evidence that the recovery is picking up steam. Manufacturing, on the other hand, has led the recovery.
The private payrolls rise “is just another sign of re-acceleration in the labor market. Some of the details suggest that there is a 60 percent chance that the government’s payroll number could beat consensus,” said John Canally, Investment Strategist at LPL Financial in Boston.
The U.S. government’s monthly employment report on Friday is forecast to show another month of job gains in both the private and public sectors. In a Reuters poll, nonfarm payrolls are seen up 140,000 in November while private payrolls are seen up 153,000.
U.S. stocks were up more than 1 percent, helped by signs in the data that the recovery was taking hold but also supported by speculation the European Central Bank would take measures to address the euro zone debt crisis.
The price of benchmark 10-year notes was down, and the U.S. dollar was also lower against major currencies after a week of gains.
Even though economists cheered the job gains, they noted that the labor market still has a long way to go. Friday’s jobs report is forecast to show the U.S. unemployment rate remained at 9.6 percent in November.
Also, the number of planned layoffs in November by U.S. employers rose to the highest since March, according to a report by consultants Challenger, Gray & Christmas, Inc.
Employers announced 48,711 planned job cuts last month, up 28 percent from 37,986 in October, with the government and nonprofit sector leading the rise, the report showed.
Providing a more upbeat view of the economy was a government report showing construction spending posted a 0.7 percent gain in October. Expectations had been for a 0.4 percent decline in spending, a Reuters poll showed.
In another report, nonfarm productivity grew faster than previously estimated in the third quarter. According to the government data, productivity increased at an annual rate of 2.3 percent rather than the 1.9 percent pace reported last month, as employers squeezed more output from workers and kept costs down.
