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Economy in Brief

U.S. ADP Nonfarm Private Payrolls Strengthen in September
by Tom Moeller  October 6, 2021

• Increase outpaces expectations.

• Large payroll improvement is notable.

• Gains across industry sectors picked up last month.

The ADP National Employment Report indicated that nonfarm private sector payrolls rose 568,000 (4.2% y/y) during September following a 340,000 August rise, revised from 374,000. A 450,000 September increase had been expected in the Action Economics Forecast Survey. The three-month average gain fell to 410,000 from 468,000 in August. Payrolls increased 322,000 in July, revised from 326,000.

Large-sized payrolls increased 390,000 (2.9% y/y) after rising 152,000 in August. It was the largest increase since June 2020. Medium-sized payrolls rose 115,000 (6.6% y/y) following a 127,000 August rise. It was the smallest increase since February. Small-sized payrolls increased 63,000 (4.7% y/y) in September following a 127,000 August improvement. These gains are down from 237,000 averaged per month in Q2.

Within industry sectors, private service employment increased 466,000 (4.6% y/y) in September after improving 297,000 in August. It was the largest increase in three months. Leisure & hospitality sector hiring grew 226,000 (15.7% y/y). It also was the largest increase in three months, but down from 340,000 averaged in Q2. The number of education & health services jobs rose 66,000 in September (3.6% y/y) after a 54,000 August rise. A 61,000 increase (3.2% y/y) in professional & business sector employment was double the August gain. Jobs in trade, transportation & utilities rose 54,000 in September (2.4% y/y), up from a 19,000 August rise. Jobs in financial services improved 22,000 (1.3% y/y), the largest increase in twelve months. The number of information sector jobs rose 11,000 (0.3% y/y) following a 4,000 rise during August.

Employment amongst goods-producing firms increased 102,000 (2.6% y/y) in September following a 42,000 August rise. It also was the largest increase in twelve months. The number of factory sector jobs improved 49,000 last month (1.8% y/y) after rising 11,000 in August. The latest increase is more akin to the 40,000 or above gains in each month from March to May. The size of construction sector payrolls surged 46,000 in September (3.5% y/y), double the August rise. Employment in the natural resource & mining sector rose 7,000 (7.9% y/y) after an 8,000 gain.

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 Economic Effects of Changes in Personal Income Tax Rates from the Federal Reserve Bank of Philadelphia can be found here.

ADP/Moody's National Employment Report Sep Aug Jul Sep Y/Y 2020 2019 2018
Nonfarm Private Payroll Employment (m/m chg, 000s) 568 340 322 4.2% -6.4% 1.4% 1.9%
 Small Payroll (1-49) 63 61 77 4.7 -5.8 0.2 0.8
 Medium Payroll (50-499) 115 127 118 6.6 -7.2 1.9 2.2
 Large Payroll (>500) 390 152 127 2.9 -6.3 1.7 2.4
Goods-Producing 102 42 14 2.6 -4.1 1.5 3.0
  Construction 46 23 3 3.5 -2.5 2.5 4.4
  Manufacturing 49 11 7 1.8 -4.7 1.0 2.1
Service-Producing 466 297 308 4.6 -6.8 1.3 1.7
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