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Economy in Brief

ADP Reports That Job Gains Remain Lethargic
by Tom Moeller  October 5, 2011

According to the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers, private nonfarm payrolls grew 91,000 following an 89,000 increase during August, revised from 91,000. The latest beat Consensus expectations for a 45,000 rise. The recent small monthly increases left the three-month growth rate at 1.1% (AR), down from February's 2.4%.

The U.S. Bureau of Labor Statistics will report September payroll employment this Friday. Economists expect a 56,000 worker increase in jobs. By comparison, the August increase of 89,000 in ADP's measure of private nonfarm payrolls was accompanied by a 17,000 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 compiles 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.

A 90,000 increase in service-producing payrolls led the gain in the latest ADP estimate. Goods-producing payrolls rose all of 1,000. Factory sector jobs slipped 5,000. Overall, small-sized payrolls grew 60,000 m/m (1.8% y/y) while medium-sized payrolls rose 36,000 (1.9% y/y). Large payrolls slipped 5,000 (0.3% y/y). Construction employment rose 2,000 and the number of financial activities jobs again was unchanged.

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. The expectations figures are available in Haver's AS1REPNAdatabase.

How Economic News Moves Markets is a new study by the Federal Reserve Bank of New York and it can be found here.

ADP National Employment Report Sep Aug Jul Y/Y 2010 2009 2008
Nonfarm Private Payroll Employment (m/m Chg., 000s) 91 89 107 1.6% -1.1% -4.8% -0.6%
 Small Payroll (1-49) 60 58 56 1.8 -0.8 -3.9 0.0
 Medium Payroll (50-499) 36 31 43 1.9 -1.0 -5.6 -0.9
 Large Payroll (>500) -5 0 8 0.3 -2.0 -5.6 -1.9
Goods Producing 1 9 -1 1.0 -5.1 -12.3 -3.6
  Manufacturing -5 -7 1 1.3 -3.3 -11.3 -3.2
Service Producing 90 83 108 1.7 -0.2 -3.1 0.1
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