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Economy in Brief

U.S. ADP Private Payrolls Surge
by Tom Moeller  February 5, 2020

The ADP National Employment Report indicated that private nonfarm payrolls increased 291,000 (1.5% y/y) during January following a 199,000 December gain, revised from 202,000. It was the largest increase in roughly five years and likely was aided by mild winter weather. The gain exceeded expectations for a 155,000 rise in the Action Economics Forecast Survey. During the last three months, payrolls rose an average 204,000 per month, compared to a high of 260,000 in July of 2018.

Small payrolls increased 94,000 (0.7% y/y) following a 66,000 December gain. It was the largest rise since July 2018. Medium-sized payrolls strengthened 128,000 (2.0% y/y), the largest gain in nine months. Large-sized payrolls improved 69,000 (2.3% y/y), the largest increase in six months.

Within industry sectors, employment at goods-producing firms rose 54,000 (0.7% y/y) last month after a 21,000 December increase. Construction sector payrolls strengthened 47,000 last month (2.1% y/y) following a 35,000 improvement. Factory sector employment rebounded 10,000 last month (0.1% y/y) and reversed December's decline. Employment in the natural resource & mining sector eased 2,000 (-4.8% y/y) and has been falling since March 2019.

Employment growth in the private service sector strengthened to 237,000 (1.7% y/y) after a 178,000 December rise. Average three-month growth of 179,000 contrasts to a high of 196,000 as of July 2018. Leisure & hospitality employment surged a record 96,000 (2.1% y/y). Education & health services jobs rose 70,000 (2.5% y/y), the largest increase since September 2016. Employment in professional business services increased 49,000 (2.1% y/y), double the increases registered this past summer & fall. Trade, transportation & utilities payrolls rose 8,000 (0.8% y/y) after an outsized 68,000 strengthening in December. Payrolls in finance increased a lessened 2,000 (1.4% y/y). Information sector payrolls improved 2,000 and were unchanged y/y.

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 Jan Dec Nov Jan Y/Y 2019 2018 2017
Nonfarm Private Payroll Employment (m/m chg, 000s) 291 199 121 1.5% 1.8% 2.0% 1.7%
 Small Payroll (1-49) 94 66 29 0.7 1.0 1.5 1.5
 Medium Payroll (50-499) 128 87 58 2.0 2.4 2.3 1.8
 Large Payroll (>500) 69 46 34 2.3 2.3 2.3 2.1
Goods-Producing 54 21 0 0.7 1.8 3.1 1.7
  Construction 47 35 3 2.1 3.3 5.0 3.3
  Manufacturing 10 -10 3 0.1 1.0 1.8 0.8
Service-Producing 237 178 121 1.7 1.8 1.7 1.8
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