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Economy in Brief

U.S. ADP Nonfarm Private Payrolls Disappoint in August
by Tom Moeller  September 1, 2021

• Increase is roughly half expectations.

• Leisure & hospitality industry strengthens m/m.

• Construction improves but factory hiring remains weak.

The ADP National Employment Report indicated that nonfarm private sector payrolls rose 374,000 (4.5% y/y) following a 326,000 July increase, revised from 330,000. A 650,000 rise had been expected in the Action Economics Forecast Survey. The three-month average gain fell to 480,000 from 650,000 in July. Payrolls increased 741,000 in June, revised from 680,000.

Small-sized payrolls increased 86,000 (5.3% y/y) in August, about the same as in July. Medium-sized payrolls rose 149,000 (7.3% y/y) last month after improving 128,000 in July. Large-sized payrolls grew 138,000 (2.8% y/y) in August after a 113,000 July rise. All of these increases were well below their June gains.

Within industry sectors, private service employment increased 329,000 (4.8% y/y) in August after improving 311,000 in July. It was close to the weakest rise since February. Showing some strength was hiring in the leisure & hospitality sector where payrolls rose 201,000 (15.3% y/y) which followed a 138,000 July gain. The number of education & health services jobs rose 59,000 in August (3.9% y/y) after a 63,000 rise in July. Jobs in trade, transportation & utilities rose 18,000 in August (2.9% y/y), half the July rise. It was the weakest gain since January. A 19,000 August rise (3.3% y/y) in the number of professional business services jobs was below the triple-digit increases logged in the spring of 2020. Jobs in financial services improved 13,000 (1.4% y/y) after rising 8,000 in July. The number of information sector jobs held steady both m/m and y/y, following a 1,000 decline in July.

Employment amongst goods-producing firms increased 45,000 (3.2% y/y) in August following a 15,000 July rise. The number of factory sector jobs improved 6,000 last month (2.5% y/y) after rising 8,000 in July. Increases had been 40,000 or above in each month from March to May. The size of construction sector payrolls surged 30,000 in August (3.8% y/y) following a 3,000 increase. Employment in the natural resource & mining sector rose 9,000 (8.1% y/y) after two months of 4,000 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 Aug Jul Jun Aug Y/Y % 2020 2019 2018
Nonfarm Private Payroll Employment (m/m chg, 000s) 374 326 741 4.5 -6.4 1.4 1.9
 Small Payroll (1-49) 86 85 218 5.3 -5.8 0.2 0.8
 Medium Payroll (50-499) 149 128 238 7.3 -7.2 1.9 2.2
 Large Payroll (>500) 138 113 286 2.8 -6.3 1.7 2.4
Goods-Producing 45 15 57 3.2 -4.1 1.5 3.0
  Construction 30 3 35 3.8 -2.5 2.5 4.4
  Manufacturing 6 8 19 2.5 -4.7 1.0 2.1
Service-Producing 329 311 684 4.8 -6.8 1.3 1.7
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