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By Jason Stipp and Robert Johnson, CFA | 01-03-2013 08:30 AM

Can the Jobs Report Beat Expectations?

A strong ADP employment report for December may raise hopes for Friday's government employment report, but an upside surprise is not a given.

Jason Stipp: I'm Jason Stipp for Morningstar. Ahead of Friday’s government employment report for December, we got ADP data on the private sector for December. It showed 215,000 private sector jobs were added. That was higher than a lot of analysts expected.

Here to give their take on the report and what it could mean for Friday's report is Bob Johnson, our director of economic analysis, and Vishnu Lekraj who is an equity analyst who covers the employment sector. Thanks for joining me, guys.

Vishnu Lekraj: Thank you.

Bob Johnson: Great to be here.

Stipp: So, Vishnu, top line number 215,000 private sector jobs added was better than expectations. What's your take on that number?

Lekraj: It's a good number, a great number. It was way above what analysts were expecting, what most people were expecting, to be honest with you.

With the fiscal cliff talks, with the dysfunction in Washington, we can't even pass a bill until the last minute, there was a lot of uncertainty and everyone was fearful that businesses weren't going to spend and weren’t going to hire, but according to ADP, they did hire, it looked like they spent a little bit more and in a more robust way than what most people thought.

Stipp: Bob, there were a few drivers behind that number. One of the bigger ones was retail. It was better than you thought we might see for retail?

Johnson: Yes, we were up over 50,000 jobs, according to the ADP report, for December, and that was a much better number than I expected. It was my biggest worry for this month's report, because we've had a couple of really great months in retail, and just kind of so-so retail sales, so I figured eventually they’d adjust some of the hiring, and I was really expecting a relatively dismal retail number for the month of the December from both the government and from ADP, but the ADP report said, if anything, accelerated hiring happened in December.

Stipp: So, why did some of that hiring happen? What was behind it?

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