Global| Aug 05 2009ADP Report: Rate Of Job Loss Smallest Since October
by:Tom Moeller
|in:Economy in Brief
Summary
Deterioration in the U.S. labor market continued last month, just not at the same rate as it had. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payrolls fell [...]
Deterioration in the U.S. labor market continued last month, just not at the same rate as it had. The latest report from the payroll processor ADP, in their National Employment Report, indicated that private nonfarm payrolls fell 371,000 during July after a revised 463,000 June decline that was slightly shallower than reported initially. The latest reading was the eighteenth consecutive monthly decline, but the monthly change was the smallest since October of last year and roughly half the worst this past March. The three-month annualized rate of decline in payrolls also eased to 4.6% from its March peak 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 July payroll employment this Friday. For comparison, June's 463,000 worker decline in ADP's measure of private nonfarm payrolls was accompanied by 415,000 job losses 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 medium-sized payrolls remained in forefront
of July job loss. They fell another 159,000 (-5.8% y/y) followed by a
138,000 (-4.4% y/y) worker decline in small-sized payrolls. Large
payrolls fell by 74,000 (-5.7% y/y). In a switch from the prior
pattern, the steady decline in service producing industry employment
outpaced that in the goods sector. The 202,000 (-3.3% y/y) drop was the
sixteenth consecutive monthly decline and in percentage terms roughly
equaled the prior three months. These recent declines are, however,
roughly half the worst from December through March. Medium-sized
service payrolls fell 86,000 (-3.7% y/y) and small-sized payrolls
dropped 80,000 (-2.9% y/y). Large service producing payrolls dropped by
36,000 (-3.5% y/y).
In the goods producing sector there were 169,000 fewer jobs in
July (-13.1% y/y). Here, the three-month rate of change eased to a
still hefty -13.1% from -17.1% at its worst. Details show that
medium-sized payrolls fell 73,000 (-13.7% y/y) followed by a 58,000
(-12.5% y/y) shortfall in small-sized payrolls. Large payrolls fell
38,000 (-13.1% y/y). In the manufacturing sector alone, payrolls fell
99,000 (-12.8% 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.| LAXEPA@USECON | July | June | Y/Y | 2008 | 2007 | 2006 |
|---|---|---|---|---|---|---|
| Total Nonfarm Private Payroll Employment (m/m Chg., 000s) | -371 | -463 | -5.2% | -0.5% | 1.2% | 2.0% |
| Small Payroll (1-49) | -138 | -169 | -4.4 | -0.0 | 1.6 | 2.2 |
| Medium Payroll (50-499) | -159 | -203 | -5.8 | -0.5 | 1.2 | 1.9 |
| Large Payroll (>500) | -74 | -91 | -5.7 | -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.
More Economy in Brief
