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Economy in Brief

U.S. ADP Employment Increase Throttles Back
by Tom Moeller  July 30, 2014

Employment growth eased last month. The ADP/Moody's National Employment Report indicated a 218,000 rise (2.2% y/y) in July nonfarm private sector jobs. It followed an unrevised June increase of 281,000. During the last three months, job increases averaged 237,000, below the peak of 259,000 in February of 2012. The July job gain fell short of the 238,000 rise expected in the Action Economics Forecast Survey. During the last twenty years there has been a 95% correlation between the monthly ADP job gain and the rise in private sector nonfarm payrolls.

The ADP survey is based on ADP's business payroll transaction system covering 406,000 companies and roughly 23 million employees. The data are processed by Moody's Analytics Inc., then calibrated and aligned with the BLS data. Extensive information on the methodology is available here.

The overall hiring slowdown was greatest amongst small businesses. It totaled 84,000 (2.2% y/y) following a 127,000 rise. Medium-sized firms' payrolls advanced 93,000 (1.9% y/y), reduced from an 111,000 increase. Jobs at large-size companies rose 42,000 (2.5% y/y) for the third straight month.

Broken out by sector, service-producing payrolls led last month's job gain with a 202,000 increase (2.2% y/y), but it was easier than the 238,000 June rise. Jobs in professional and business services increased 61,000 (3.4% y/y) after an 80,000 gain; transportation and utilities employment grew a roughly stable 52,000 (2.1% y/y) but financial activities headcount improved 8,000 (0.6% y/y), down from the 13,000 June increase. Goods-producing payrolls rose 16,000 (1.9% y/y), the weakest rise in six months. Factory sector payrolls inched up 2,000 (0.8% y/y), also the weakest rise since January, while construction payrolls improved 12,000 (4.0% y/y), the smallest rise since last August.

The ADP National Employment Report data are maintained in Haver's USECON database; historical figures date back to March 2001. The figures in this report cover jobs only in the private sector. The expectation figure is available in Haver's AS1REPNA database.

ADP/Moody's National Employment Report Jul Jun May Y/Y 2013 2012 2011
Nonfarm Private Payroll Employment (m/m chg, 000s) 218 281 214 2.2% 2.0% 2.3% 1.8%
 Small Payroll (1-49) 84 127 98 2.2 2.1 2.5 1.1
 Medium Payroll (50-499) 93 111 74 1.9 1.6 2.0 2.0
 Large Payroll (>500) 42 42 42 2.5 2.3 2.4 2.7
Goods-Producing 16 42 36 1.9 1.6 2.2 1.7
 Manufacturing 2 10 10 0.8 0.6 1.6 1.9
Service-Producing 202 238 178 2.2 2.0 2.3 1.8
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