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Economy in Brief

U.S. ADP Payroll Increase Paced by Small Businesses
by Tom Moeller  November 4, 2015

The ADP/Moody's National Employment Report indicated that nonfarm private sector payrolls increased 182,000 during October after a 190,000 September rise, revised from 200,000. The latest was firmer than expectations for a 178,000 gain in the Action Economics Forecast Survey. During the last ten years, there has been a 97% correlation between the change in the ADP figure and the change in nonfarm private sector payrolls as measured by the Bureau of Labor Statistics.

The ADP survey is based on ADP's business payroll transaction system covering 411,000 companies and nearly 24 million employees. The data are processed by Moody's Analytics Inc., then calibrated and aligned with the BLS establishment survey data. The ADP data cover private sector employment, not government.

Small-businesses strengthened hiring by 90,000 workers (2.4% y/y) in October after a 47,000 rise in the prior month. Medium-sized businesses added to payrolls by 63,000 individuals (1.9% y/y) after a 42,000 increase. Large businesses moderated hiring and added 29,000 (1.8% y/y) workers following a 101,000 September surge. That gain mostly reflected a jump in hiring by companies with 1,000 or more employees.

Hiring in the goods-producing sector of the economy increased 24,000 (1.2% y/y), the largest gain in nine months. Service industry hiring grew a lessened 158,000 (2.3% y/y), the smallest increase since January 2014. Payrolls in trade, transportation & utilities industries improved 35,000 (1.9% y/y). Professional & business services payrolls grew 13,000 (2.4% y/y). That compares to monthly increases as high as 81,000 at the peak in June 2014. Employment in financial activities improved 9,000 (1.8% y/y). Hiring in the construction sector remained firm as it posted a 35,000 increase (4.9% y/y), a ten year high. Factory sector payrolls eased 2,000 (+0.3% y/y) after a 17,000 decline.

The ADP National Employment Report data are maintained in Haver's USECON database; historical figures date back to April 2001 for the total and industry breakdown and back to January 2005 for the business size breakout. The expectation figure is available in Haver's AS1REPNA database.

ADP/Moody's National Employment Report Oct Sep Aug Oct Y/Y 2014 2013 2012
Nonfarm Private Payroll Employment (m/m chg, 000s) 182 190 182 2.1% 2.3% 1.9% 2.3%
 Small Payroll (1-49) 90 47 92 2.4 2.1 1.9 2.5
 Medium Payroll (50-499) 63 42 70 1.9 2.8 2.2 2.1
 Large Payroll (>500) 29 101 19 1.8 1.8 1.6 2.1
Goods-Producing 24 8 13 1.2 2.3 1.7 2.2
  Construction 35 34 18 4.9 4.6 3.5 2.5
  Manufacturing -2 -17 3 0.3 1.2 0.9 1.6
Service-Producing 158 182 169 2.3 2.3 2.0 2.3
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