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Economy in Brief

ADP Reports Another Modest Employment Gain
by Tom Moeller  November 2, 2011

The labor market continues on the mend, just not too quickly. According to the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers, private nonfarm payrolls grew 110,000 (0.1%) during October following a 116,000 increase in September, revised from 91,000. The latest exceeds Consensus expectations for a 105,000 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 October payroll employment this Friday. Economists expect a 44,000 worker increase in jobs. By comparison, the September increase of 116,000 in ADP's measure of private nonfarm payrolls was accompanied by a 137,000 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 114,000 increase in service-producing payrolls led the gain in the latest ADP estimate while goods-producing payrolls fell 4,000. Factory sector jobs slipped 8,000. Overall, small-sized payrolls grew 58,000 m/m (1.8% y/y) while medium-sized payrolls rose 53,000 (1.9% y/y). Large payrolls slipped another 1,000 (+0.3% y/y). Construction employment slipped 1,000 and the number of financial activities jobs ticked up 1,000.

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. The expectations figures are available in Haver's AS1REPNA database.

ADP National Employment Report Oct Sep Aug Y/Y 2010 2009 2008
Nonfarm Private Payroll Employment (m/m Chg., 000s) 110 116 85 1.6% -1.1% -4.8% -0.6%
 Small Payroll (1-49) 58 64 56 1.8 -0.8 -3.9 0.0
 Medium Payroll (50-499) 53 48 31 1.9 -1.0 -5.6 -0.9
 Large Payroll (>500) -1 4 1 0.3 -2.0 -5.6 -1.9
Goods Producing -4 -6 5 1.0 -5.1 -12.3 -3.6
  Manufacturing -8 -7 -8 1.2 -3.3 -11.3 -3.2
Service Producing 114 122 80 1.7 -0.2 -3.1 0.1
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