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Economy in Brief

U.S. ADP Private Payrolls Decline as Coronavirus Effects Begin
by Tom Moeller  April 1, 2020

• Labor market weakness gets underway in March.

• Service-sector employment declines, particularly in small businesses.

The ADP National Employment Report indicated that nonfarm private payrolls during March fell 27,000 (+1.3% y/y) following a 179,000 February increase, revised from 183,000. ADP conducts its monthly survey during the week that includes the 12th of the month, so it preceded the stronger layoff activity in recent weeks. The latest figure compared to a 200,000 decline expected in the Action Economics Forecast Survey.

Small payrolls declined 90,000 (-0.3% y/y) following a fairly steady 21,000 February gain. Medium-sized payrolls rose 7,000 (1.1% y/y) after a 27,000 rise, which was half the January rise. Large-sized payrolls improved 56,000 (2.2% y/y) after a fairly steady steady131,000 rise.

Within industry sectors, employment at goods-producing firms eased 9,000 (+0.2% y/y) last month after a 12,000 rise, which also was half the upwardly revised January increase. Construction sector payrolls fell 16,000 last month (+1.3% y/y), the first decline in nine months. Factory sector employment improved 6,000 (-0.3% y/y), the first increase in four months. Employment in the natural resource & mining sector edged 1,000 higher (-2.0% y/y), but was down versus March 2019.

Employment growth in the private service sector declined 18,000 (+1.5% y/y) after a 167,000 February strengthening. Education & health services jobs improved a steady 48,000 (2.4% y/y). Financial activities payrolls held steady (1.3% y/y). These figures were offset by a collapse of 37,000 (+0.7% y/y) in trade, transportation & utilities, the largest decline in ten years. Leisure & hospitality employment fell 11,000 (+2.1% y/y) after two monthly increases of roughly 45,000. Employment in professional & business services weakened 3,000 (+1.8% y/y). Information sector payrolls declined 7,000 (-0.5% 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 Mar Feb Jan Mar Y/Y 2019 2018 2017
Nonfarm Private Payroll Employment (m/m chg, 000s) -27 179 205 1.3% 1.5% 1.8% 1.7%
 Small Payroll (1-49) -90 21 22 -0.2 0.2 0.6 1.1
 Medium Payroll (50-499) 7 27 54 1.1 2.0 2.0 1.9
 Large Payroll (>500) 56 131 130 2.2 1.9 2.3 2.0
Goods-Producing -9 12 24 0.2 1.6 2.9 1.8
  Construction -16 19 33 1.3 2.7 4.1 3.7
  Manufacturing 6 -4 -5 -0.3 1.0 1.9 0.8
Service-Producing -18 167 181 1.5 1.5 1.6 1.7
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