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Economy in Brief

U.S. ADP Private-Sector Payroll Gains Strengthen
by Tom Moeller  May 1, 2019

ADP indicated in its National Employment Report that private nonfarm payrolls increased 275,000 (2.1% y/y) during April following a 151,000 gain during March, revised from 129,000. The February increase also was revised up to 220,000 from 197,000. The April rise was the strongest increase since July. A 180,000 gain had been expected in the Action Economics Forecast Survey. The three-month average rise in private-sector payrolls was fairly steady at 215,000. During the last ten years, there has been an 84% 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 National Employment Report is calculated from ADP's business payroll transaction system covering 411,000 companies and nearly 24 million employees. The data is calibrated and aligned with the Bureau of Labor Statistics establishment survey data and is produced by the Automatic Data Processing Research Institute in collaboration Moody's Analytics Inc. The ADP data only cover private sector employment.

Small business hiring improved to 77,000 (1.3% y/y), the strongest gain in three months. The three-month average gain of 42,000 was down, however, from 70,000 as of January. Medium-sized payrolls rose a strengthened 145,000 (2.9% y/y) and by a steady 108,000 on a three-month basis. Large payrolls rose 53,000 m/m (2.3% y/y) and by a steady  65,000 during the last three months.

Goods-producing employment rose 52,000 (2.6% y/y) in April after a 1,000 dip. The three-month average increase weakened to 30,000, down from 73,000 as of March 2018. Construction sector payrolls strengthened by 49,000 (4.7% y/y) after a 3,000 rise. The three-month average change eased to 25,000. Manufacturing sector employment rose 5,000 (1.3% y/y). The three-month average rise eased, also to 5,000, its weakest gain since December 2016. It was down from a 25,000 high as of March 2018. Natural resource and mining sector payrolls declined 2,000. Twelve-month growth fell to 3.6% from its high of 9.2% last June.

Private service-sector payrolls strengthened 223,000 (2.0% y/y), the strongest rise since June 2016. Three-month average growth of 185,000 has been fairly steady since June. Professional and business services payrolls gained an improved 59,000 (2.9% y/y). Jobs in education & health services strengthened a steady 54,000 (2.3% y/y). Leisure & hospitality employment rose 53,000 (2.8% y/y), the strongest increase since June. Trade transportation & utilities employment rose a strengthened 37,000 (1.2% y/y). Employment in the financial services sector rose a weakened 6,000 (1.2% y/y) compared to an 18,000 peak rise last September. Information sector employment slipped 1,000 (+0.4% y/y).

The ADP National Employment Report data can be found 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 Apr Mar Feb Apr Y/Y 2018 2017 2016
Nonfarm Private Payroll Employment (m/m chg, 000s) 275 151 220 2.1% 2.0% 1.7% 2.0%
 Small Payroll (1-49) 77 20 30 1.3 1.5 1.5 1.9
 Medium Payroll (50-499) 145 73 107 2.9 2.3 1.8 1.5
 Large Payroll (>500) 53 59 83 2.3 2.3 2.1 2.7
Goods-Producing 52 -1 39 2.6 3.1 1.7 0.8
  Construction 49 3 24 4.7 5.0 3.3 4.3
  Manufacturing 5 -6 17 1.3 1.8 0.8 0.1
Service-Producing 223 152 180 2.0 1.7 1.8 2.2
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