ADP Report: Payroll Employment Down Another 742,000

According to the payroll processor ADP in the latest National Employment Report, private nonfarm payrolls fell 742,000 last month after a 706,000 decline. The February figure was revised from the initial estimate of a 697,000 drop. The latest reading was the fourteenth consecutive monthly decline. Moreover, the annualized rate of decline in payrolls accelerated to 7.2% during the last three months, a record for the series which dates back only to 2001. Last month medium sized payrolls fell 330,000 (-4.5% y/y) followed by a 284,000 (-3.3% y/y) worker decline in small sized payrolls. Large payrolls fell by 128,000 (-4.7% y/y). The U.S. Bureau of Labor Statistics will report payroll employment this Friday. For comparison, February's 706,000 worker decline (-3.4% y/y) in ADP's measure of private nonfarm payrolls was accompanied by a 660,000 worker decline (-3.7% y/y) 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 weakness in the goods producing sector resulted in 327,000 fewer jobs last month (-10.1% y/y). Medium sized payrolls fell 152,000 (-10.5% y/y) followed by a 111,000 (-9.3% y/y) shortfall in small sized payrolls. Large payrolls fell 64,000 (-10.5% y/y). In the manufacturing sector alone, payrolls fell 206,000 (-10.1% y/y). It has fallen in almost every month since 2001. Employment in the service producing industry continued to fall sharply. The 415,000 (-2.6% y/y) decline was the twelfth consecutive monthly decline. Medium sized service payrolls fell 178,000 (-2.9% y/y) and small sized payrolls were off 173,000 (-2.2% y/y). Large service producing payrolls dropped by 64,000 (-3.0% y/y). 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 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 here, and the ADP methodology is explained here.

LAXEPA@USECON	March	February	Y/Y	2008	2007	2006
Nonfarm Private Payroll Employment (m/m Chg.)	-742,000	-706,000	-4.0%	-0.4	1.2%	2.0%