Have We Turned The Corner on Jobs?

Friday's unemployment report could beat consensus estimates, but the public sector is still weak.

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Two new reports out today bolster recent indications that the U.S. economy has staved off a double-dip and is entering a stronger recovery.

Today, private payroll firm ADP announced that the private sector added 206,000 jobs in November, the largest gain in 11 months, and well up from October's figure of 130,000. And outplacement firm Challenger, Gray & Christmas reported that the number of planned layoffs in November was 42,474, down slightly from the month before, but down 13 percent from November 2010.

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"Today's number represents a pretty notable acceleration of employment that I think is consistent with the notion that the U.S. economy has skirted the back end of the double dip recession and is charting its way through perilous waters towards a gradual upturn," says Joel Prakken, chairman of consulting firm Macroeconomic Advisers.

Prakken also noted that strength is "pretty much evident throughout all the slices in the data that we provide." Jobs were added in small, medium, and large firms alike, and in both the goods-producing and service-providing sectors.

The ADP report beat consensus estimates of around 130,000 new private-sector jobs, meaning that Friday's employment report from the Labor Department could also do better than consensus forecasts, at around 120,000 jobs added to the U.S. economy.

Friday's report could once again show the public sector taking a bite out of job growth. Labor Department data shows the government losing jobs in 11 of the last 12 months. This year, government has been by far the biggest job-cutting industry, announcing nearly 181,000 cuts—already a 30 percent increase over total announced government cuts in 2010.

"Over the past six months, we definitely have seen a shift away from the heavy government job cuts at the state and local level toward increased job cuts at the federal level. The worst may be yet to come, as cutbacks spread from the military to every other agency in Washington," said John Challenger, CEO of Challenger, Gray & Christmas, in a statement on this morning's numbers, adding that the US Postal Service alone could cut 200,000 workers.

Once again, it appears that the mood surrounding the labor market is one of cautious optimism. Prakken notes that official data shows early signs of strength: "In particular, the number of people who are voluntarily quitting their current jobs is starting to move up. And that typically is a sign of improving labor markets," he says.

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Of course, the labor market is still nowhere near a robust, resilient recovery. The U.S. economy's consistently modest jobs gains could still easily be derailed. And with a prolonged crisis in Europe and persistent U.S. government gridlock, there is still reason to be guarded about hopes for strong economic growth.

Twitter: @titonka