Wednesday's economic data offered more than a glimmer of hope for the recession-weary. According to ADP's monthly survey, private payrolls increased by a staggering 300,000 new jobs. The number tripled economists' expectations and it represented the largest single-month booster shot since the survey began back in 2000.
Of course, the ADP survey rarely comes close to emulating the U.S. government's official stats. In November, ADP reported 92,000 new jobs whereas the U.S. government logged just 39,000. What's more, a single month's data point rarely reflects the broader trend.
There's little doubt, however, that job growth has accelerated. And while some of the credit may go to a willingness of corporations to open their wallets, a large portion of the credit must also go to the outcome of the congressional elections in early November. Not only did the Republican victories solidify the likelihood of tax cut extensions, but they helped persuade business leaders that a new era of pro-business sentiment was on the way.
Think this isn't the case? Investors do.The current perception that government gridlock will end big government legislation (e.g., FINREG financial regulation) as well as White House energy intervention (e.g., drilling moratorium) lifted SPDR Select Energy (XLE) as well as SPDR Select Financials (XLF) out of the doghouse. In fact, both areas finished in the top half of 1-month sector performers.