Private-sector job growth dipped last month

WASHINGTON - Hiring by private U.S. businesses ticked down last month.

Payroll processor ADP said Wednesday that companies added 213,000 jobs last month, below a consensus estimate of 223,000 jobs and the smallest increase in four months. The figure suggests Friday's government report will also show a solid burst of hiring.

The ADP numbers cover only private businesses and sometimes diverge from the government's more comprehensive report, which includes government agencies.

Businesses have added 200,000 jobs or more in nine of the past 10 months, according to the ADP report.

Manufacturers added 14,000 jobs, down from 23,000 in December. Construction companies hired 18,000 more workers, down from 26,000 the previous month. But services companies ramped up hiring: A category that includes retail, transportation and utilities firms added 54,000 jobs, up from 40,000 in December.

Mark Zandi, chief economist at Moody's Analytics, which compiles the report, said that oil and gas drilling companies have started to cut back on their payrolls in response to a sharp drop in the price of oil. Yet companies that have benefited from lower oil prices have yet to step up hiring, he said.

"Bottom line, job gains slowed, due in part to the energy sector, but at more than 200,000 the monthly job gains still remain good, not great," said Peter Boockvar, chief market analyst with The Lindsey Group, in a client note.

Overall, healthy economic growth has encouraged employers to add jobs. The economy expanded at a 4.1 percent annual pace in the final nine months of last year. Consumers ramped up their spending in the fourth quarter at the fastest pace since 2006, as lower gas prices and steady job growth boosted their spending power. Most analysts expect the economy to grow this year at the fastest pace in a decade.

Employers added nearly 3 million new jobs in 2014, making it the best year for hiring since 1999.

Still, the job market is not yet back to full health. There are about 6.8 million people are working part-time but would prefer full-time work, up from just 4.1 million before the downturn.

And last year's job gains have yet to push up wages much. They rose just 2.1 percent in 2014, the Labor Department said last week. That's up slightly from the previous year, but below the roughly 3.5 percent gain that is consistent with a healthy economy. Analysts with Goldman Sachs said in a report this week they expect wage growth to reach 2.75 percent by year-end, suggesting that the economy remains some ways before firing on all cylinder.

The U.S. Labor Department will release its January labor report on Friday. Most forecasters expect the economy to have added around 230,000 jobs last month.