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Economy in Brief

U.S. ADP Nonfarm Private Payroll Increase Weakens in October
by Tom Moeller  November 4, 2020

• Slowdown is broad-based across company size.

• Employment increase is well below expectations.

The ADP National Employment Report indicated that nonfarm private sector payrolls increased 365,000 (-7.3% y/y) during October following a 753,000 September rise, revised from 749,000. August payrolls rose 482,000, revised from 481,000. A 671,000 increase had been expected in the Action Economics Forecast Survey. The ADP report is based on survey data through October 12.

Large payrolls increased 116,000 (-7.5% y/y) following a 296,000 rise, revised from 297,000. It was the smallest increase since the beginning of the recovery. Medium-sized payrolls improved 135,000 (-8.6% y/y) after a 252,000 September increase, revised from 259,000. Small-sized payrolls rose 114,000 (-5.7% y/y) after a 204,000 gain during the prior month, revised from 192,000.

Within industry sectors, employment amongst goods-producing firms edged 17,000 higher (-3.7% y/y) following a 198,000 September improvement, revised from 196,000. The size of construction sector payrolls improved just 7,000 (-1.7% y/y) following an unrevised 60,000 increase. Factory sector employment also rose 7,000 last month (-4.4% y/y) after firming a little-changed 131,000 during September. Employment in the natural resource & mining sector edged 3,000 higher (-11.9% y/y), up for the third straight month.

Employment in the private service sector rose 348,000 (-8.0% y/y) during October following a 555,000 September gain, revised from 552,000. A 125,000 rise (-23.4% y/y) in leisure & hospitality employment led the increase following an unrevised 92,000 increase. The number of education & health services jobs rose 79,000 (-4.3% y/y) after improving an unrevised 90,000 in September. A 60,000 gain (-6.1% y/y) in the number of professional business services jobs followed an 81,000 rise, revised from 78,000. Trade, transportation & utilities jobs increased 53,000 (-5.2% y/y) after rising a little-revised 185,000 in September. Jobs in financial services rose 6,000 (-1.3% y/y) after improving 29,000. Information sector payrolls held steady (-10.4% y/y) following a 17,000 increase.

The Automatic Data Processing Research Institute survey covers 411,000 companies and includes about one-fifth of U.S. private payroll employment. 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 Oct Sep Aug Oct Y/Y 2019 2018 2017
Nonfarm Private Payroll Employment (m/m chg, 000s) 365 753 482 -7.3% 1.5% 1.8% 1.7%
 Small Payroll (1-49) 114 204 71 -5.7 0.2 0.6 1.1
 Medium Payroll (50-499) 135 252 90 -8.6 2.0 2.0 1.9
 Large Payroll (>500) 116 296 321 -7.5 1.9 2.3 2.0
Goods-Producing 17 198 47 -3.7 1.6 2.9 1.8
  Construction 7 60 26 -1.7 2.7 4.1 3.7
  Manufacturing 7 131 19 -4.4 1.0 1.9 0.8
Service-Producing 348 555 435 -8.0 1.5 1.6 1.7
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