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Economy in Brief

ADP Reports Moderate Job Growth
by Tom Moeller  August 1, 2012

Employment continues to grow. Private sector payrolls rose 163,000 in July as reported by the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers. A 120,000 gain had been expected. The latest followed a 172,000 rise in June, initially reported as 176,000.

The U.S. Bureau of Labor Statistics will announce July payroll employment Friday. Economists expect a 105,000 worker increase in private sector jobs. By comparison, the June increase of 172,000 in ADP's measure of private nonfarm payrolls was accompanied by an 84,000 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 148,000 (2.0% y/y) last month following growth as high as 225,000 in December. Goods-producing payrolls gained 15,000 (1.2% y/y) in July, slightly less than June's increase of 21,000. Factory sector jobs rose 6,000 (0.6% y/y). Overall, small-sized payrolls again led last month's job growth with a 73,000 increase (2.0% y/y). Medium-sized payrolls followed with a 67,000 rise (2.0% y/y) while large payrolls advanced 23,000 (0.8% y/y), the strongest gain since December. Construction employment rose 5,000 and the number of financial activities jobs added 9,000.

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 Jul Jun May Y/Y 2011 2010 2009
Nonfarm Private Payroll Employment (m/m Chg., 000s) 163 172 131 1.8% 1.4% -1.0% -4.1%
 Small Payroll (1-49) 73 91 64 2.0 1.4 -0.9 -4.1
 Medium Payroll (50-499) 67 69 57 2.0 1.8 -0.9 -5.7
 Large Payroll (>500) 23 12 10 0.8 0.4 -1.8 -5.6
Goods Producing 15 21 -3 1.2 0.8 -4.8 -12.4
  Manufacturing 6 9 -5 0.6 1.3 -3.2 -11.4
Service Producing 148 151 134 2.0 1.5 -0.2 -3.2
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