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Economy in Brief

U.S. ADP Private Payroll Growth Moderates
by Tom Moeller  October 2, 2019

The ADP National Employment Report indicated that private nonfarm payrolls increased 135,000 (1.7% y/y) during September after an August rise of 157,000, revised from 195,000. Payrolls increased 143,000 during July, revised from 142,000. A 140,000 September increase had been expected in the Action Economics Forecast Survey. ADP payrolls have risen an average 145,000 per month so far this year compared to a 219,000 monthly average in 2018. 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 payrolls increased 30,000 (0.8% y/y) following a 55,000 gain during August. They have risen an average 30,000 over the last three months, roughly half the monthly average during all of last year. Medium-sized payrolls rose 39,000 (2.1% y/y) after a 62,000 August rise. The three-month average change of 54,000 compares to 114,000 per month averaged during 2018. Large-sized payrolls rose 67,000 (2.5% y/y) after a 39,000 increase. Three-month average growth of 61,000 was improved from the average monthly rise last year.

Private service-sector payrolls strengthened 127,000 (1.7% y/y) last month, down from 146,000 in August and 144,000 in July. Three-month growth averaged 139,000 versus 168,000 last year. Jobs in education & health services rose a fairly steady 42,000 (2.5% y/y) but the trend has been strengthening. The increase in leisure & hospitality jobs moderated to 18,000 (2.2% y/y). Jobs in trade, transportation & utilities rose 28,000 (0.9% y/y) after a 23,000 increase. The rise in professional & business services hiring moderated to 20,000 in September (2.2% y/y) from a high of 50,000 per month in Q3'18. Financial activities employment rose a fairly steady 8,000 (1.2% y/y). Information sector payrolls improved 5,000 (0.4% y/y) following four straight months of decline.

Employment in the goods-producing sector increased 8,000 (1.2% y/y) last month after a 10,000 August rise. Manufacturing sector employment edged 2,000 higher (0.6% y/y), down from this year's high of 22,000 in January. Construction sector payrolls rose 9,000 (2.5% y/y), but that was also was down sharply versus a 62,000 jump during January. Lower oil prices continued to weigh on hiring in the natural resource & mining sector. Payrolls here declined 3,000 (-2.4% y/y). Payrolls have declined for six straight months and were sharply below the 2014 high.

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 Sep Aug Jul Sep Y/Y 2018 2017 2016
Nonfarm Private Payroll Employment (m/m chg, 000s) 135 157 143 1.7% 2.0% 1.7% 2.0%
 Small Payroll (1-49) 30 55 4 0.8 1.5 1.5 1.9
 Medium Payroll (50-499) 39 62 61 2.1 2.3 1.8 1.5
 Large Payroll (>500) 67 39 79 2.5 2.3 2.1 2.7
Goods-Producing 8 10 -1 1.2 3.1 1.7 0.8
  Construction 9 11 13 2.5 5.0 3.3 4.3
  Manufacturing 2 3 -7 0.6 1.8 0.8 0.1
Service-Producing 127 146 144 1.7 1.7 1.8 2.2
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