GlobalJob growth is continuing at a moderate pace. Private nonfarm payrolls rose 170,000 last month after a 292,000 December increase which was revised down from 325,000 reported last month. The figures come from the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers. The latest increase was less than Consensus expectations for a 180,000 gain. The recent monthly increases left three-month growth at 2.5% (AR).
The U.S. Bureau of Labor Statistics will report January payroll employment on Friday. Economists expect a 155,000 worker increase in jobs. By comparison, the December increase of 292,000 in ADP's measure of private nonfarm payrolls was accompanied by a 212,000 gain in the BLS measure of private sector jobs. According to ADP and Macro-Advisers, the correlation between the monthly percentage change in the ADP figure and the BLS data is 0.90. ADP compiles its estimate from its database of individual companies' payroll information. Macroeconomic Advisers, LLC, the St. Louis economic consulting firm, developed the methodology for transforming the raw data into an economic indicator.
The service sector continued to lead improvement in the job market. Its 152,000 worker gain (1.9% y/y) contrasted to an 18,000 increase (1.2% y/y) in goods-producing payrolls while factory sector jobs rose 10,000 (0.9% y/y). Overall, small-sized payrolls again showed the most improvement with a 95,000 (2.0% y/y) gain. Medium-sized payrolls followed with a 72,000 (2.0% y/y) increase while large payrolls grew just 3,000 (0.6% y/y). Construction employment ticked up 2,000 and the number of financial activities jobs rose 9,000.
The ADP National Employment Report data is maintained in Haver's USECON database; historical figures date back to December 2000. The figures in this report cover only private sector jobs and exclude employment in the public sector. The ADP methodology is explained here. The expectations figures are available in Haver's AS1REPNA database.
Why Is Unemployment Duration So Long? from the Federal Reserve Bank of San Francisco is available here http://www.frbsf.org/publications/economics/letter/2012/el2012-03.html?utm_source=home
| ADP National Employment Report | Jan | Dec | Nov | Y/Y | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Nonfarm Private Payroll Employment (m/m Chg., 000s) | 170 | 292 | 209 | 1.8% | 1.4% | -1.1% | -4.8% |
| Small Payroll (1-49) | 95 | 136 | 111 | 2.0 | 1.6 | -0.8 | -3.9 |
| Medium Payroll (50-499) | 72 | 126 | 85 | 2.0 | 1.8 | -1.0 | -5.6 |
| Large Payroll (>500) | 3 | 30 | 13 | 0.6 | 0.2 | -2.0 | -5.6 |
| Goods Producing | 18 | 51 | 28 | 1.2 | 0.7 | -5.1 | -12.3 |
| Manufacturing | 10 | 20 | 5 | 0.9 | 1.2 | -3.3 | -11.3 |
| Service Producing | 152 | 241 | 181 | 1.9 | 1.6 | -0.2 | -3.1 |
U.S. ISM Factory Index Reaches A
Six-Month High
by Tom
Moeller February 1, 2012
Further improvement in the factory sector is in evidence. The Composite Index of factory sector activity from the Institute For Supply Management rose to a six-month high of 53.9, from an unrevised 52.7 in November. The latest reading beat Consensus expectations for improvement to 53.1. The reading was the highest since June and was the twenty-ninth consecutive monthly figure above the break-even level of 50.
All but one of the index's five components rose m/m, with the strongest gain in production and employment. The production figure was its highest since April and the employment number was its best since June. During the last ten years there has been an 89% correlation between the employment series level and the m/m change in factory sector payrolls. The new orders figure also was its highest since April while the supplier deliveries component showed no change in the speed of filling orders. The inventory index reversed its November gain.
The price index rose to 47.5 but remained below the break-even level of 50 for the third consecutive month. Twenty-one percent of firms raised prices, the least since the recession's end, while twenty-six percent lowered them. During the last ten years there has been an 83% correlation between the index and the m/m change in the core intermediate producer price index.
The separate index of new export orders fell to 53.0, its best since September. Reflecting a better U.S. economy, the imports series rose above break-even for the first time since September.
The ISM figures are diffusion indexes and can be found in Haver's USECON database. The expectations data are in the AS1REPNA database.
| ISM Mfg | Jan | Dec | Nov | Jan'11 | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Composite Index | 53.9 | 52.7 | 58.5 | 55.3 | 57.3 | 46.3 | |
| New Orders | 57.6 | 56.7 | 62.0 | 56.5 | 59.3 | 51.7 | |
| Production | 59.9 | 56.6 | 63.0 | 57.5 | 61.1 | 50.5 | |
| Employment | 55.1 | 51.8 | 58.9 | 57.5 | 57.3 | 40.6 | |
| Supplier Deliveries | 49.9 | 49.9 | 56.7 | 54.7 | 58.1 | 51.5 | |
| Inventories | 47.1 | 48.3 | 51.8 | 50.1 | 50.8 | 37.1 | |
| Prices Paid Index (NSA) | 47.5 | 45.0 | 72.5 | 65.2 | 68.9 | 48.3 |
U.S. Construction Spending Gain Is
Better-Than-Expected
by Tom
Moeller February 1, 2012
The level of building activity continues to improve, moderately. Construction spending during November rose 1.2% following a 0.2% October slip, revised from the 0.8% gain reported initially. However, September's gain was revised sharply higher to 1.1%. Consensus expectations were for a 0.4% November gain. These m/m machinations left the level of activity at its highest since June, 2010.
Private sector spending rose a sharp 1.0% led by a 2.0% rise (3.4% y/y) rise in residential building. The value of home-improvements again led the increase with a 2.6% rise (4.1% y/y). The value of single-family building rose 1.5% (2.5% y/y) and multi-family building increased 1.3% (4.1% y/y). Nonresidential building activity was unchanged m/m (4.5% y/y) with the y/y strength led by a 12.6% rise in factory sector building, a 12.0% gain in commercial construction, a 10.0% gain in education and a 9.2% rise in transportation. Building in the lodging sector fell 20.5% y/y and health care fell 4.9% y/y.
Public construction activity rose 1.7% (-5.3% y/y) and reversed its October decline. Power facility building jumped by nearly one-quarter m/m (-5.1% y/y) while highways & streets construction rose 1.9% (-2.2% y/y). The value of building in the latter category is nearly one-third of the public construction total. The value of building in the educational sector rose 0.5% (2.8% y/y). Office building fell 12.4% y/y and water supply was off 10.8% y/y.
The construction put-in-place figures are available in Haver's USECON database. The expectations figure is contained in Haver's AS1REPNA database.
| Construction Put in Place (%) | Dec | Nov | Oct | Y/Y | 2011 | 2010 | 2009 |
|---|---|---|---|---|---|---|---|
| Total | 1.2 | -0.2 | 0.5 | -11.3 | -15.3 | ||
| Private | 1.0 | 0.7 | 4.0 | -15.2 | -22.4 | ||
| Residential | 2.0 | 2.3 | 3.4 | -2.9 | -29.9 | ||
| Nonresidential | 0.0 | -0.6 | 4.5 | -24.0 | -16.0 | ||
| Public | 1.7 | -1.8 | -5.3 | -3.9 | 2.1 |
