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Economy in Brief

ADP Indicates Another Moderate Job Increase
by Tom Moeller  October 3, 2012

Employment growth remained moderate last month. September private sector payrolls rose 162,000 (2.0% y/y) as reported by the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers. The rise beat consensus expectations for a 140,000 increase but was down from the August gain of 189,000, initially reported as 201,000.

The U.S. Bureau of Labor Statistics will announce September payroll employment on Friday. Economists expect a 134,000 worker increase in private sector jobs. By comparison, the August increase of 189,000 in ADP's measure of private nonfarm payrolls accompanied a 103,000 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 a moderated 144,000 (2.1% y/y) last month after a 175,000 August increase. Goods-producing payroll growth remained subdued at 18,000 (1.3% y/y) and that reflected a 4,000 (0.8% y/y) worker increase in factory sector jobs. Overall, small-sized payrolls again led last month's job growth with an 81,000 increase (2.2% y/y). Medium-sized payrolls followed with a 64,000 rise (2.2% y/y) while large payrolls advanced just 17,000 (1.0% y/y). Construction employment rose 10,000, up for the fourth straight month, and the number of financial activities jobs increased a diminished 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 Sep Aug Jul Y/Y 2011 2010 2009
Nonfarm Private Payroll Employment (m/m Chg., 000s) 162 189 156 2.0% 1.4% -1.0% -4.1%
 Small Payroll (1-49) 81 94 69 2.2 1.4 -0.9 -4.1
 Medium Payroll (50-499) 64 79 64 2.2 1.8 -0.9 -5.7
 Large Payroll (>500) 17 16 23 1.0 0.4 -1.8 -5.6
Goods Producing 18 14 13 1.3 0.8 -4.8 -12.4
  Manufacturing 4 2 6 0.8 1.3 -3.2 -11.4
Service Producing 144 175 143 2.1 1.5 -0.2 -3.2
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