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Economy in Brief

ADP Report: June Private Sector Payrolls Down, Earlier Figures Revised Up
by Tom Moeller July 2, 2008

The ADP National Employment Report, from the payroll processor, reported that private nonfarm payrolls fell 79,000 last month after a revised 25,000 increase during May. Declines in payrolls reported for earlier months this year were revised to show modest increases.

The U.S. Bureau of Labor Statistics will report on June nonfarm payrolls tomorrow. Last month, the 25,000 worker rise in ADP's measure of private nonfarm payrolls was accompanied by a 66,000 worker decline in the BLS measure of private sector payrolls.

According to ADP and Macro Advisers, the correlation between the monthly percentage change in the ADP estimate and that in the BLS data is 0.90.

The ADP sub-index for large payrolls fell 51,000 (-1.2% y/y) after a 19,000 worker decline during May.

Medium sized payrolls also were quite weak and posted a 35,000 (+0.4% y/y) decline.

A 7,000 worker increase (1.1% y/y) in small sized payrolls during June was much reduced after the 50,000 May increase.

Employment in the goods producing industries fell a huge 76,000 (-2.4% y/y) and the rate of decline has intensified as this year has progressed. Services payrolls also fell but by a lesser 3,000 (1.2% y/y).

ADP compiled the estimate from its database of individual companies' payroll information. Macroeconomic Advisers, LLC, the St. Louis economic consulting firm, developed the methodology for transforming the raw data into an economic indicator.

The ADP National Employment Report data is maintained in Haver's USECON database; historical data go back to December 2000. The figures in this report cover only private sector jobs and exclude employment in the public sector, which rose an average 11,083 during the last twelve months.

The full ADP National Employment Report can be found here, and the ADP methodology is explained here.

LAXEPA@USECON June May Y/Y 2007 2006 2005
Nonfarm Private Payroll Employment (m/m Chg.) -79,000 25,000 0.7% 1.1% 1.7% 1.8%
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