Global| Mar 31 2010ADP Report: Private Sector Job Loss Disappoints Expectations
by:Tom Moeller
|in:Economy in Brief
Summary
The rate of job loss has been slowing for a year, but a turn to positive territory isn't yet at hand. The latest report from the payroll processor ADP, in their National Employment Report, indicated that February private nonfarm [...]
The rate of job loss has been slowing for a year, but a turn
to positive territory isn't yet at hand. The latest report from the
payroll processor ADP, in their National Employment Report, indicated
that February private nonfarm payroll levels declined 23,000 following
a revised 24,000 decline during January. The decline compared to the
Consensus expectation for a gain of 40,000 jobs. The latest reading was
the twenty-sixth consecutive monthly decline but it was the smallest of
the period. Earlier data were revised. /p>
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 February payroll employment this Friday. For comparison, the January decline of 24,000 in ADP's measure of private nonfarm payrolls was accompanied by a similar loss of 18,000 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 private service-producing industry employment rose for the second consecutive month with a gain of 28,000 (-1.3% y/y). Small-sized payrolls grew 15,000 (-0.9% y/y) while medium-sized payrolls grew 10,000 (-1.4% y/y). These increases were accompanied by a 3,000 increase (-1.9% y/y) in large service producing payrolls.
In the goods producing sector employment fell another 51,000 during February (-8.7% y/y) but the three-month annual rate of change eased again to -3.9% versus -18.1% one year ago. Small-sized payrolls fell 27,000 (-9.4% y/y) while medium-sized payrolls fell 14,000 (-7.9% y/y). Large payrolls fell 10,000 (-9.2% y/y). In the manufacturing sector alone, payrolls fell 9,000 (-6.5% y/y). The three-month change moderated to -1.1% from -17.5% last March.
The ADP National Employment Report data is maintained in Haver's USECONdatabase; 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 full ADP National Employment Report can be found here and the ADP methodology is explained here.
| ADP National Employment Report | February | January | December | Y/Y | 2009 | 2008 | 2007 |
|---|---|---|---|---|---|---|---|
| Total Nonfarm Private Payroll Employment (m/m Chg., 000s) | -23 | -24 | -82 | -2.6% | -4.9% | -0.7% | 1.1% |
| Small Payroll (1-49) | -12 | -19 | -35 | -2.1 | -4.1 | -0.1 | 1.8 |
| Medium Payroll (50-499) | -4 | 6 | -20 | -2.7 | -5.7 | -0.9 | 1.0 |
| Large Payroll (>500) | -7 | -11 | -27 | -3.5 | -5.6 | -1.8 | -0.2 |
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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