Global| Nov 04 2009ADP Report: Payroll Employment Decline Continues But The Pace Moderates
by:Tom Moeller
|in:Economy in Brief
Summary
Payroll employment fell again last month, but the rate of decline recently has eased. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payrolls fell 203,000 during [...]
Payroll
employment fell again last month, but the rate of decline recently has
eased. The latest report from the payroll processor ADP, in their
National Employment Report, indicated that private nonfarm payrolls
fell 203,000 during October after a revised 227,000 September decline
which was shallower than reported initially. The latest reading was the
twenty-first consecutive monthly decline. The monthly change, however,
was the smallest since July of last year and two-thirds the size of the
worst reading last March. The three-month annualized rate of decline in
payrolls also eased to 2.5% from its March record of 7.1%.
ADP compiled the 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 U.S. Bureau of Labor Statistics will report October payroll employment this Friday. For comparison, the September decline of 227,000 in ADP's measure of private nonfarm payrolls was accompanied by a loss of 210,000 jobs in the BLS measure of private sector payrolls. According to ADP and Macro-Advisers, the correlation between the monthly percentage change in the ADP estimate and that in the BLS data is 0.90.
ADP reported that the decline in small-sized payrolls moderated to 75,000 (-4.3%). That matched the 75,000 (-5.5% y/y) decline in medium-sized payrolls. Large payrolls fell by 53,000 (-5.6% y/y). The steady decline in service-producing industry employment continued. The October drop of 86,000 (-3.1% y/y), was the twentieth consecutive monthly decline but in percentage terms the three-month rate of change moderated to -1.3%, less than two-thirds the worst from December through March. The decline in medium-sized service payrolls moderated to 30,000 (-3.4% y/y) and small-sized payrolls declined 34,000 (-2.8% y/y). Large service producing payrolls dropped by 22,000 and the y/y decline held steady at 3.4%.
In the goods producing sector employment fell 117,000 in October (-13.2% y/y). Here, the three-month rate of decline eased again but only to -8.4% versus -17.3% at its worst. Small-sized payrolls fell 41,000 (-12.9% y/y) followed by a 45,000 (-13.3% y/y) drop in medium-sized payrolls. Large payrolls fell 31,000 (-13.4% y/y). In the manufacturing sector alone, payrolls fell 65,000 (-12.5% y/y).
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, which rose an average 11,083 during the last twelve
months.
The full ADP National Employment Report can be found herep pand the ADP methodology is explained here.
| LAXEPA@USECON | October | September | Y/Y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Total Nonfarm Private Payroll Employment (m/m Chg., 000s) | -203 | -227 | -5.0% | -0.5% | 1.2% | 2.0% |
| Small Payroll (1-49) | -75 | -90 | -4.3 | -0.0 | 1.6 | 2.2 |
| Medium Payroll (50-499) | -75 | -81 | -5.5 | -0.5 | 1.2 | 1.9 |
| Large Payroll (>500) | -53 | -56 | -5.6 | -1.6 | -0.1 | 0.4 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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