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Economy in Brief

U.S. ADP Nonfarm Private Payrolls Are Unexpectedly Strong in October
by Tom Moeller  November 3, 2021

• Strength is broad-based across payroll size.

• Construction & factory sectors firm.

• Service sector strengthening led by leisure & hospitality industry.

The ADP National Employment Report indicated that nonfarm private sector payrolls rose 571,000 (4.3% y/y) during October after increasing 523,000 in September, revised from 568,000. A 380,000 October increase had been expected in the Action Economics Forecast Survey. The three-month average gain rose to 468,000 from 385,000. Payrolls increased 310,000 in August, revised from 340,000.

Large-sized payrolls increased 342,000 (3.3% y/y) last month after rising 373,000 in September. Small-sized payrolls added 115,000 (4.5% y/y) following two consecutive gains of roughly 50,000 gain. Medium-sized payrolls improved 114,000 in October (6.2% y/y) following a 98,000 September rise.

Within industry sectors, private service employment increased 458,000 (4.5% y/y) in October after rising 431,000 in September. It was the largest increase in four months. Leisure & hospitality employment gained 185,000 (15.6% y/y) after rising 200,000. Professional & business service sector payrolls increased 88,000 (3.2% y/y) after a 58,000 rise. It was the largest monthly gain in a year. Employment in the trade, transportation & utilities sector added 78,000 jobs (2.5% y/y), the largest increase in five months. The number of education & health services jobs rose 56,000 in October (3.4% y/y), about the same as in September. Employment in financial services improved 15,000 (1.3% y/y) following a 19,000 gain. The number of information sector jobs rose 14,000 (1.0% y/y), the same as in September.

Employment amongst goods-producing firms increased 113,000 (3.0% y/y) in October following a 92,000 September rise. It also was the largest increase since September of last year. The number of factory sector jobs rose an accelerated 53,000 last month (2.1% y/y) after improving 43,000 in September. The size of construction sector payrolls surged 54,000 in October (3.9% y/y), up from 42,000 in September. Employment in the natural resource & mining sector rose 6,000 (8.1% y/y) after a 7,000 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.

ADP/Moody's National Employment Report Oct Sep Aug Oct Y/Y 2020 2019 2018
Nonfarm Private Payroll Employment (m/m chg, 000s) 571 523 310 4.3% -6.4% 1.4% 1.9%
 Small Payroll (1-49) 115 52 50 4.5 -5.8 0.2 0.8
 Medium Payroll (50-499) 114 98 116 6.2 -7.2 1.9 2.2
 Large Payroll (>500) 342 373 143 3.3 -6.3 1.7 2.4
Goods-Producing 113 92 37 3.0 -4.1 1.5 3.0
  Construction 54 42 20 3.9 -2.5 2.5 4.4
  Manufacturing 53 43 10 2.1 -4.7 1.0 2.1
Service-Producing 458 431 273 4.5 -6.8 1.3 1.7
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