Recent Updates

  • Malaysia: CPI (Dec)
  • Malaysia: CPI by State (Dec)
  • China: Foreign Exchange Settlement and Sales (Dec)
  • New Zealand: Measure of Inflation (Dec)
  • Flash PMIs: Japan (Jan)
  • more updates...

Economy in Brief

ADP Report: Payroll Employment Decline Continues But The Pace Moderates
by Tom Moeller November 4, 2009

Payroll employment fell again last month, but the rate of decline recently has eased. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payrolls fell 203,000 during October after a revised 227,000 September decline which was shallower than reported initially. The latest reading was the twenty-first consecutive monthly decline. The monthly change, however, was the smallest since July of last year and two-thirds the size of the worst reading last March. The three-month annualized rate of decline in payrolls also eased to 2.5% from its March record of 7.1%.

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 U.S. Bureau of Labor Statistics will report October payroll employment this Friday. For comparison, the September decline of 227,000 in ADP's measure of private nonfarm payrolls was accompanied by a loss of 210,000 jobs 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.

ADP reported that the decline in small-sized payrolls moderated to 75,000 (-4.3%). That matched the 75,000 (-5.5% y/y) decline in medium-sized payrolls. Large payrolls fell by 53,000 (-5.6% y/y). The steady decline in service-producing industry employment continued. The October drop of 86,000 (-3.1% y/y), was the twentieth consecutive monthly decline but in percentage terms the three-month rate of change moderated to -1.3%, less than two-thirds the worst from December through March. The decline in medium-sized service payrolls moderated to 30,000 (-3.4% y/y) and small-sized payrolls declined 34,000 (-2.8% y/y). Large service producing payrolls dropped by 22,000 and the y/y decline held steady at 3.4%.

In the goods producing sector employment fell 117,000 in October (-13.2% y/y). Here, the three-month rate of decline eased again but only to -8.4% versus -17.3% at its worst. Small-sized payrolls fell 41,000 (-12.9% y/y) followed by a 45,000 (-13.3% y/y) drop in medium-sized payrolls. Large payrolls fell 31,000 (-13.4% y/y). In the manufacturing sector alone, payrolls fell 65,000 (-12.5% y/y).

The ADP National Employment Report data is maintained in Haver's USECON database; historical figures date 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 herep pand the ADP methodology is explained here.

[email protected] October September Y/Y 2008 2007 2006
Total Nonfarm Private Payroll Employment (m/m Chg., 000s) -203 -227 -5.0% -0.5% 1.2% 2.0%
   Small Payroll (1-49) -75 -90 -4.3 -0.0 1.6 2.2
   Medium Payroll (50-499) -75 -81 -5.5 -0.5 1.2 1.9
   Large Payroll (>500) -53 -56 -5.6 -1.6 -0.1 0.4
large image