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Economy in Brief

U.S. ADP Nonfarm Private Payrolls Decline Unexpectedly During December
by Tom Moeller  January 6, 2021

• Job loss follows seven months of increase.

• Declines ranged throughout most economic sectors.

As the number of COVID-19 cases increase, the labor market suffered. The ADP National Employment Report indicated that nonfarm private sector payrolls declined 123,000 (-7.4% y/y) during December following a 304,000 November rise, revised from 307,000. October payrolls gained 409,000, revised from 404,000. A 122,000 December rise had been expected in the Action Economics Forecast Survey. The ADP report is based on survey data through December 12.

Large payrolls declined 147,000 (-8.1 y/y) following a 44,000 November rise, revised from 58,000. It was the first decline since April and earlier monthly gains had been steadily decelerating since July. Small sized payrolls fell 13,000 last month (-5.2% y/y) after increasing 118,000, revised from 110,000. Medium-sized payrolls improved 37,000 (-8.0% y/y) after increasing 142,000 during November, revised from 139,000.

Within industry sectors, private service employment declined 105,000 (-8.0% y/y) after increasing a little-revised 275,000 in November. A 58,000 drop (-23.4% y/y) in leisure & hospitality hiring followed a lessened 94,000 November gain. Jobs in trade, transportation & utilities fell 50,000 (-5.4% y/y) after improving 30,000 in November. The number of information sector jobs eased 6,000 (-10.5% y/y) after slipping 1,000 in November. To the upside last month, the number of education & health services jobs rose 8,000 (-4.3% y/y) following strong increases in each of the prior seven months. A lessened 12,000 gain (-6.0% y/y) in the number of professional business services jobs followed a 59,000 November rise. Monthly increases had been decelerating for three months. Jobs in financial services edged 2,000 higher (-1.4% y/y) after increasing 8,000 during November.

Employment amongst goods-producing firms weakened 18,000 (-3.9% y/y) after strengthening 29,000 in November, revised from 31,000. The number of factory sector jobs declined 21,000 (-4.7% y/y), the first decline since April. The size of construction sector payrolls edged 3,000 higher (-1.6% y/y) following a 22,000 increase. Employment in the natural resource & mining sector held steady (-11.5% y/y) after increasing slightly for four straight months.

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.

The minutes to the latest FOMC meeting can be found here.

ADP/Moody's National Employment Report Dec Nov Oct Dec Y/Y 2020 2019 2018
Nonfarm Private Payroll Employment (m/m chg, 000s) -123 304 409 -7.4% -6.3% 1.5% 1.8%
 Small Payroll (1-49) -13 118 158 -5.2 -5.9 0.2 0.6
 Medium Payroll (50-499) 37 142 161 -8.0 -7.4 2.0 2.0
 Large Payroll (>500) -147 44 89 -8.1 -6.0 1.9 2.3
Goods-Producing -18 29 23 -3.9 -4.0 1.6 2.9
  Construction 3 22 9 -1.6 -2.3 2.7 4.1
  Manufacturing -21 7 12 -4.7 -4.7 1.0 1.9
Service-Producing -105 275 385 -8.0 -6.8 1.5 1.6
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