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Economy in Brief

ADP Reports A Pickup In Job Growth
by Tom Moeller November 30, 2011

Recent job market improvement gained momentum last month. According to the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers, private nonfarm payrolls grew 206,000 (0.2% m/m) during November following a 130,000 rise in October, revised from 110,000. The latest easily beat Consensus expectations for a 130,000 gain. The recent monthly increases pulled three-month growth to 1.7% (AR), the strongest since April.

The U.S. Bureau of Labor Statistics will report November payroll employment this Friday. Economists expect a 125,000 worker increase in jobs. By comparison, the October increase of 130,000 in ADP's measure of private nonfarm payrolls was accompanied by a 104,000 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.

The service sector again led last month's job market improvement with a 178,000 (1.9% y/y) increase in employment. Goods-producing payrolls lagged that with a 28,000 (1.1% y/y) rise while factory sector jobs rose 7,000 (1.1% y/y). Overall, small-sized payrolls were the strongest growth area with a 110,000 (1.9% y/y) gain. Medium-sized payrolls followed with an 84,000 (2.0% y/y) rise and large payrolls rose a modest 12,000 (0.5% y/y). Construction employment rose 16,000 and the number of financial activities jobs ticked up 7,000.

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 Nov Oct Sep Y/Y 2010 2009 2008
Nonfarm Private Payroll Employment (m/m Chg., 000s) 206 130 130 1.7% -1.1% -4.8% -0.6%
 Small Payroll (1-49) 110 67 71 1.9 -0.8 -3.9 0.0
 Medium Payroll (50-499) 84 60 51 2.0 -1.0 -5.6 -0.9
 Large Payroll (>500) 12 3 8 0.5 -2.0 -5.6 -1.9
Goods Producing 28 0 -6 1.1 -5.1 -12.3 -3.6
  Manufacturing 7 -5 -7 1.1 -3.3 -11.3 -3.2
Service Producing 178 130 136 1.9 -0.2 -3.1 0.1
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