December ADP jobs report called 'wildly optimistic'

The private sector added 297,000 jobs nationwide in December, according to a report released Wednesday by the payroll firm ADP. But while the report caused a stir in some markets -- lifting the dollar, for example -- skeptics say it is just too good to be true.

It was the largest monthly increase since the company launched its report in 2006 -- and about two to three times what many economists expect the federal government's numbers to show Friday.

Economists expect the Labor Department to report a gain of about 150,000 jobs in December compared to November, a Bloomberg News survey said.

Several economists told Newsday Wednesday they expect to see an increase of 125,000 to 165,000 jobs. They said the ADP report, which is often based on a smaller sample and uses different methodology than the government, has been off before.

Ken Goldstein, labor economist for The Conference Board in Manhattan, said, "I think it's a screwy number, and it's not the first time that ADP has come out with a screwy number."

While emphasizing that he respects the economists behind the report for ADP and Macroeconomic Advisers Llc, he said it was "wildly optimistic."

On its blog, Macroeconomic Advisers said because of "normal problems with seasonal adjustment," the report was "very likely overstating growth of private payrolls." Still, Joel Prakken, chairman of Macroeconomic Advisers, said on CNBC that based on the past few months, "there is a very clear pattern of acceleration now. I would not discount today's number as a total fluke."

David Resler, chief U.S. economist for Manhattan-based Nomura Securities International Inc., said of the report, "There's probably useful information in it, but it ought not to be taken as a literal equivalent to the data we get from the government, which is much more reliable."