Other data on Wednesday also pointed to a brightening outlook, with
the services industry expanding at a decent pace last month and
exports hitting a record high in October.
There was also good news on the housing market as new home sales
posted their largest increase in nearly 33-1/2 years.
"The economy seems to be building enough momentum that growth should
accelerate as we move through the first part of next year," said
Joel Naroff, chief economist at Naroff Economic Advisers in Holland,
Private employers added 215,000 new jobs to their payrolls last
month, according to payroll processor ADP.
It was the biggest rise in a year and beat economists' expectations
for a gain of 173,000 jobs. At the same time, the figure for October
was revised up to 184,000 from 130,000.
The jobs data comes ahead of the government's much more
comprehensive employment count for November on Friday.
That report, which covers both public and private sector hiring, is
expected to show an increase of 180,000 in nonfarm payrolls after a
204,000 rise in October, according to a Reuters poll of economists.
Some economists said the ADP data suggested the government report
could show a larger gain than the consensus forecast. Their optimism
was tempered a bit by a gauge of services industry jobs showing
growth dropping to a six-month low for November.
The upbeat tone was also captured by a separate report from the Fed
on Wednesday that described the economy as expanding at a "modest to
moderate pace" in October and early November.
The signs of economic momentum weighed on U.S. Treasury debt prices
as traders speculated the Fed could begin to trim its bond-buying
stimulus as soon as its next meeting on December 17-18. U.S. stocks
were trading lower, while the dollar reversed gains versus the euro
and the yen.
"If the ADP does prove to be a good guide, a 200,000 plus gain (in
nonfarm payrolls) might just be enough to persuade the Fed to begin
its QE taper later this month," said Paul Ashworth, chief U.S.
economist at Capital Economics in Toronto.
Other economists said, however, the Fed was still more likely to
wait until January or March to reduce its current $85 billion a
month bond-buying pace.
SERVICES SECTOR STILL GROWING
Separately, the Institute for Supply Management said its services
index fell to 53.9 last month from 55.4 in October. A reading above
50 indicates expansion in the sector. November marked the 47th
straight month of growth in the services sector.
A sub-index of services industry employment fell to its lowest level
since May, but also stayed in expansion territory.
[to top of second column]
"The data are still suggesting at least a modest net pickup in the
trend in overall growth recently, even with this somewhat weaker
reading for November," said Jim O'Sullivan, chief U.S. economist at
High Frequency Economics in Valhalla, New York.
A separate report from the Commerce Department showed the nation's
trade deficit shrank 5.4 percent to $40.6 billion in October,
suggesting trade will likely contribute to growth this quarter.
Exports, which had declined for three straight months, hit an
all-time high, pointing to a pick-up in global demand.
Imports also rose, reaching a 1-1/2 year high, as demand for
consumer goods and industrial supplies and materials increased.
"This is an encouraging sign for both U.S. manufacturing growth and
the state of global demand," said John Ryding, chief economist at
RDQ Economics in New York. "There is a marked acceleration in the
imports of capital goods, which may signal a brighter picture for
A survey of U.S. chief executives found spending on capital goods
and hiring were expected to rise in the next six months.
In October, petroleum exports were the highest on record. Exports to
China, Canada and Mexico reached all-time highs in October, while
exports to the 27-nation European Union also gained.
In another report, the Commerce Department said new home sales
jumped 25.4 percent to a seasonally adjusted annual rate of 444,000
units in October, more than unwinding September's 6.6 percent drop.
That suggested the housing market recovery remains intact despite
higher mortgage rates.
"Today's data shows evidence of the persistence of the positive
momentum in the housing market," said Ward McCarthy, chief financial
economist at Jefferies in New York. "Strong new home sales will
translate into rising building permits and housing starts."
[By Lucia Mutikani © 2013 Thomson Reuters. All
(Reporting by Lucia Mutikani; Additional reporting by Rodrigo Campos
and Ellen Freilich in New York; Editing by Andrea Ricci and Chizu
Copyright 2013 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.