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Economy in Brief

ADP Reports Another Firm Jobs Gain
by Tom Moeller  February 2, 2011

The job market continued to show improvement last month. In its latest National Employment Report, the payroll processor, Automatic Data Processing (ADP), indicated that the level of private nonfarm payrolls rose another 187,000 m/m during January. The gain exceeded Consensus expectations for a 145,000 increase and it followed a downwardly revised 247,00 December gain, which still was near the record for the series which dates back to 2001.

The U.S. Bureau of Labor Statistics will report January payroll employment on Friday. Economists expect a 136,000 worker increase in jobs. For comparison, the December increase of 247,000 in ADP's measure of private nonfarm payrolls was accompanied by a 113,000 rise in the BLS measure of private sector jobs. 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 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.

Another firm gain in private service producing payrolls of 166,000 was the greatest source of strength in the ADP report. It was the twelfth consecutive monthly increase. Goods producing payrolls rose for the third month by 21,000 led by a 19,000 rise in factory sector jobs. Small-sized payrolls grew 97,000 m/m (0.8% y/y) while medium-sized payrolls rose 79,000 (1.1% y/y). Large service-producing payrolls rose 11,000 (0.4% y/y). Construction employment slipped by 1,000 but financial activities jobs rose 11,000.

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. The ADP methodology is explained here.

ADP National Employment Report Jan Dec Nov Y/Y 2010 2009 2008
Nonfarm Private Payroll Employment (m/m Chg., 000s) 187 247  97 0.8% -1.2% -4.9% -0.7%
Small Payroll (1-49) 97 95 53 0.8 -1.0 -4.1 -0.1
Medium Payroll (50-499) 79 127 41 1.1 -1.2 -5.7 -0.9
Large Payroll (>500) 11 25 3 0.4 -1.9 -5.6 -1.8
Goods Producing 21 22 12 -0.8 -5.6 -12.3 -3.7
 Manufacturing 19 23 17 0.7 -3.3 -11.1 -3.0
Service Producing 166 225 85 1.2 -0.3 -3.3 0.0
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