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Economy in Brief

ADP Reports Improved Job Gains
by Tom Moeller  September 6, 2012

Employment growth accelerated last month. August private sector payrolls rose 201,000 as reported by the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers. The gain was the strongest since March and it easily beat expectations for a 140,000 increase. The latest rise followed a 172,000 gain in July, initially reported as 163,000.

The U.S. Bureau of Labor Statistics will announce August payroll employment tomorrow. Economists expect a 145,000 worker increase in private sector jobs. By comparison, the July increase of 173,000 in ADP's measure of private nonfarm payrolls was accompanied by a 172,000 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 185,000 (2.1% y/y) last month, the strongest increase since December. Goods-producing payroll growth remained subdued at 16,000 (1.2% y/y). Factory sector jobs rose just 3,000 (0.7% y/y). Overall, small-sized payrolls again led last month's job growth with a 99,000 increase (2.2% y/y). Medium-sized payrolls followed with an 86,000 rise (2.2% y/y) while large payrolls advanced just 16,000 (0.9% y/y). Construction employment rose 10,000 and the number of financial activities jobs increased 8,000.

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. 

Assessing State Business Climate Indexes from the Federal Reserve Bank of San Francisco can be found here.

 

ADP National Employment Report Aug Jul Jun Y/Y 2011 2010 2009
Nonfarm Private Payroll Employment (m/m Chg., 000s) 201 173 173 2.0% 1.4% -1.0% -4.1%
 Small Payroll (1-49) 99 77 90 2.2 1.4 -0.9 -4.1
 Medium Payroll (50-499) 86 73 71 2.2 1.8 -0.9 -5.7
 Large Payroll (>500) 16 23 12 0.9 0.4 -1.8 -5.6
Goods Producing 16 17 17 1.2 0.8 -4.8 -12.4
  Manufacturing 3 6 7 0.7 1.3 -3.2 -11.4
Service Producing 185 156 156 2.1 1.5 -0.2 -3.2
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