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Economy in Brief

U.S. ADP Private Payroll Gain Is Strongest Since 2014
by Tom Moeller  March 8, 2017

The ADP/Moody's National Employment Report indicated that private nonfarm payroll employment increased 298,000 (1.9% y/y) during February, the largest rise since April 2014. It followed a 261,000 January gain, revised from 246,000, and a 201,000 increase during December, revised from 151,000. Expectations had been for a 195,000 February rise in the Action Economics Forecast Survey. During the last ten years, there has been a 96% 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 Automatic Data Processing Research Institute 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 only.

Small-sized business payrolls increased 104,000 (1.5% y/y), the strongest rise since June. Hiring by medium-sized businesses rose 122,000 (1.9% y/y), the firmest increase since January 2014. Large-sized businesses posted a slightly reduced 72,000 increase in jobs (2.6% y/y).

Service-producing payrolls increased 193,000 (2.0% y/y) after a 207,000 rise. Professional & business payrolls rose 66,000 (2.9% y/y), the strongest gain since April 2014. Employment in education & health services increased 40,000 (2.4% y/y), while leisure & hospitality employment also rose 40,000 (2.1% y/y). Jobs in trade, transportation & utilities rose a weakened 9,000 (1.3% y/y). Financial sector payrolls rose 4,000 (1.9% y/y), but January's rise was revised up sharply to 21,000.

Goods-producing employment surged a record 106,000. Construction industry employment jumped 66,000 (3.4% y/y), the largest rise since February 2006. Hiring in the factory sector strengthened 32,000 (0.4% y/y), the strongest increase since March 2012.

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 Feb Jan Dec Feb Y/Y 2016 2015 2014
Nonfarm Private Payroll Employment (m/m chg, 000s) 298 261 201 1.9% 1.9% 2.3% 2.2%
 Small Payroll (1-49) 104 79 38 1.5 2.0 2.5 2.1
 Medium Payroll (50-499) 122 101 87 1.9 1.8 2.2 2.6
 Large Payroll (>500) 72 81 76 2.6 2.1 2.0 1.9
Goods-Producing 106 55 29 1.2 0.8 2.0 2.6
  Construction 66 31 21 3.4 4.1 5.2 4.9
  Manufacturing 32 19 8 0.4 0.2 1.2 1.4
Service-Producing 193 207 172 2.0 2.2 2.3 2.2
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