Is The Jobs Recovery Finally Here?

Has the once-mightly American jobs machine finally lurched back to life? According to a startling new employment report, the answer to that question is a long-awaited yes.

On Wednesday, business data corporation ADP said in its monthly jobs report (PDF) that private employers had added 297,000 jobs in December 2010. That figure exceeded—and, in some cases, nearly tripled—estimates by economists and the business press for December, and far outpaced the total for November, which was 92,000. Indeed, 297,000 jobs is the biggest jump since ADP began keeping jobs records in 2001.

There’s no one answer for why hiring spiked in December. One theory: “Companies have been pretty cautious and they’ve accumulated a lot of spending power, and we’ve seen that in purchases of equipment and software,” one economist told Bloomberg News. “Now they need more workers to man the equipment.

So how much should we care about the ADP report? The Wall Street Journal‘s Dave Kansas writes that ADP, for the most part, tended to underestimate jobs gains month by month in the past year. That’s partly due to government hiring, like the temporary jobs created by the Census in 2010, which briefly made the jobs rolls look healthier than they probably were. But in all but one month of 2010, the ADP jobs report low-balled the official report, released by the Labor Department’s Bureau of Labor Statistics a few days after ADP’s report comes out. Economist Mark Thoma, however, says ADP is not the most reliable of sources, especially when reporting on jobs during the holiday season, when figures fluctuate even more than usual.

Now, if the Labor Department does report encouraging numbers on Friday, it’ll be bittersweet news for the Democrats. They were trounced in midterm elections largely for their inability to jumpstart America’s jobs market, yet it was the Democrats who laid the groundwork for jobs growth last month. No doubt both parties will try to spin any good jobs news—even if it’s not as optimistic as ADP’s report—as evidence of their hard work bearing fruit.

But even if the economy added 300,000 jobs in December, that’s nowhere close to filling the massive jobs deficit plaguing the American economy. The jobs market needs not one or two but dozens of months of job growth—think 300,000 jobs or more—to be on the path to recovery. Right now, we’re not even close.


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