Jointly, ADP National Employment Report and Moody’s Analytics, revealed the US private sector occupation rate, showing that the economy has added 250,000 jobs in December marking the biggest monthly increase since March 2017.
Moreover, the report disclosed the number of Americans filing for unemployment benefits that declined unexpectedly last week, pointing to a tightening labor market and strengthening economy at the start of the year.
The labor market is near full employment, with the jobless rate at a 17-year low of 4.1%. Tightening labor market conditions have raised optimism among Federal Reserve officials that inflation will increase toward the U.S. central bank’s target of 2% this year.
Besides, the Labor Department said nonfarm productivity, which measures hourly output per worker, fell at a 0.1% annualized rate in Q3 in Q4-2017. That was the first drop and weakest performance since Q1-2016.
Economists blame soft productivity on a shortage of workers, which could be an obstacle to faster economic growth. The Trump administration has slashed income taxes as it seeks to lift annual economic growth to 3.0%.