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Economy in Brief

U.S. ADP Private Payroll Growth Improves
by Tom Moeller  July 31, 2019

Hiring in the private sector continued its recent upward trend this month. The ADP National Employment Report indicated that private nonfarm payrolls increased 156,000 (1.7% y/y) during July following a 112,000 June rise, revised from 102,000. Payrolls increased 46,000 during May, revised from 41,000. A 155,000 increase had been expected in the Action Economics Forecast Survey. ADP payrolls grew an average of 104,000 during the last three months, down from a July 2018 high of 260,000. During the last ten years there has been a 79% correlation between the change in the ADP figure and the change in nonfarm private-sector payrolls as measured by the Bureau of Labor Statistics.

Small-sized business hiring improved 11,000 (0.8% y/y) last month following a 13,000 decline during June, and a 34,000 May drop. Medium-sized payrolls grew 67,000 (2.4% y/y), about the same as in June and up sharply from the May rise of 10,000. Large-sized payrolls strengthened 78,000 (2.4% y/y), the strongest increase since February.

Private service-sector payrolls increased 146,000 (1.8% y/y) reflecting a 44,000 increase (2.5% y/y) in professional & business services hiring, the strongest gain in three months. The number of education & health services jobs grew 37,000 (2.3% y/y) after a 54,000 rise. The number of jobs in the leisure & hospitality sector improved 26,000 (2.1% y/y), also the largest rise in three months. Jobs in trade, transportation and utilities strengthened a steady 27,000 (1.0% y/y). Financial activities employment gained 11,000 (1.3% y/y), the strongest increase in five months while information sector payrolls declined 5,000, unchanged y//y.

Employment in the goods-producing sector improved 9,000 (1.5% y/y) in July following two months of decline. Construction sector payrolls rose 15,000 (2.7% y/y), after falling for two months. Jobs in the factory sector inched 1,000 higher (1.0% y/y). Lower oil prices continued to weigh on job growth in the natural resource & mining sector. Payrolls here declined 4,000 (-0.3% y/y), the largest of four straight monthly declines.

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.

The ADP National Employment Report data can be found in Haver's USECON database. Historical figures date back to 2001 for private employment and the industry breakdown, and 2005 for the business size breakout. The expectation figure is available in Haver's AS1REPNA database.

ADP/Moody's National Employment Report Jul Jun May Jul Y/Y 2018 2017 2016
Nonfarm Private Payroll Employment (m/m chg, 000s) 156 112 46 1.7 2.0 1.7 2.0
 Small Payroll (1-49) 11 -13 -34 0.8 1.5 1.5 1.9
 Medium Payroll (50-499) 67 63 10 2.4 2.3 1.8 1.5
 Large Payroll (>500) 78 63 70 2.4 2.3 2.1 2.7
Goods-Producing 9 -1 -22 1.5 3.1 1.7 0.8
  Construction 15 -6 -21 2.7 5.0 3.3 4.3
  Manufacturing 1 7 1 1.0 1.8 0.8 0.1
Service-Producing 146 113 68 1.8 1.7 1.8 2.2
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