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Economy in Brief

ADP Indicates Moderate Job Market Improvement
by Tom Moeller  July 5, 2012

Job growth rose last month but not by much. Private sector payrolls rose 176,000 in June as reported by the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers. A 100,000 gain had been expected. The latest followed a 136,000 rise in May, initially reported as 133,000.

The U.S. Bureau of Labor Statistics will announce June payroll employment tomorrow. Economists also expect a 100,000 worker increase in private sector jobs. By comparison, the May increase of 136,000 in ADP's measure of private nonfarm payrolls was accompanied by an 82,000 gain in the BLS measure of private sector jobs. According to ADP and Macro-Advisers, the correlation between the monthly percentage change in the ADP figure and the BLS data is 0.90. ADP compiles its 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.

Service producing payrolls rose 160,000 (1.9% y/y) last month following growth as high as 225,000 in December. Goods-producing payrolls gained 16,000 in June following modest declines in the prior two months. Factory sector jobs rose 4,000 and made up the May decline. Overall, small-sized payrolls led last month's job growth with a 93,000 (2.0% y/y) increase, the strongest since March. Medium-sized payrolls followed with a 72,000 (2.0% y/y) increase while large payrolls rose just 11,000 (0.7% y/y). Construction employment rose 8,000 after two months of decline and the number of 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. The expectations figures are available in Haver's AS1REPNA database.

 

ADP National Employment Report Jun May Apr Y/Y 2011 2010 2009
Nonfarm Private Payroll Employment (m/m Chg., 000s) 176 136 112 1.8% 1.4% -1.0% -4.1%
 Small Payroll (1-49) 93 67 59 2.0 1.4 -0.9 -4.1
 Medium Payroll (50-499) 72 58 52 1.9 1.8 -0.9 -5.7
 Large Payroll (>500) 11 11 1 0.7 0.4 -1.8 -5.6
Goods Producing 16 -1 -9 1.1 0.8 -4.8 -12.4
  Manufacturing 4 -4 -9 0.5 1.3 -3.2 -11.4
Service Producing 160 137 121 1.9 1.5 -0.2 -3.2
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