Global| Jul 30 2014U.S. ADP Employment Increase Throttles Back
by:Tom Moeller
|in:Economy in Brief
Summary
Employment growth eased last month. The ADP/Moody's National Employment Report indicated a 218,000 rise (2.2% y/y) in July nonfarm private sector jobs. It followed an unrevised June increase of 281,000. During the last three months, [...]
Employment growth eased last month. The ADP/Moody's National Employment Report indicated a 218,000 rise (2.2% y/y) in July nonfarm private sector jobs. It followed an unrevised June increase of 281,000. During the last three months, job increases averaged 237,000, below the peak of 259,000 in February of 2012. The July job gain fell short of the 238,000 rise expected in the Action Economics Forecast Survey. During the last twenty years there has been a 95% correlation between the monthly ADP job gain and the rise in private sector nonfarm payrolls.
The ADP survey is based on ADP's business payroll transaction system covering 406,000 companies and roughly 23 million employees. The data are processed by Moody's Analytics Inc., then calibrated and aligned with the BLS data. Extensive information on the methodology is available here.
The overall hiring slowdown was greatest amongst small businesses. It totaled 84,000 (2.2% y/y) following a 127,000 rise. Medium-sized firms' payrolls advanced 93,000 (1.9% y/y), reduced from an 111,000 increase. Jobs at large-size companies rose 42,000 (2.5% y/y) for the third straight month.
Broken out by sector, service-producing payrolls led last month's job gain with a 202,000 increase (2.2% y/y), but it was easier than the 238,000 June rise. Jobs in professional and business services increased 61,000 (3.4% y/y) after an 80,000 gain; transportation and utilities employment grew a roughly stable 52,000 (2.1% y/y) but financial activities headcount improved 8,000 (0.6% y/y), down from the 13,000 June increase. Goods-producing payrolls rose 16,000 (1.9% y/y), the weakest rise in six months. Factory sector payrolls inched up 2,000 (0.8% y/y), also the weakest rise since January, while construction payrolls improved 12,000 (4.0% y/y), the smallest rise since last August.
The ADP National Employment Report data are maintained in Haver's USECON database; historical figures date back to March 2001. The figures in this report cover jobs only in the private sector. The expectation figure is available in Haver's AS1REPNA database.
| ADP/Moody's National Employment Report | Jul | Jun | May | Y/Y | 2013 | 2012 | 2011 |
|---|---|---|---|---|---|---|---|
| Nonfarm Private Payroll Employment (m/m chg, 000s) | 218 | 281 | 214 | 2.2% | 2.0% | 2.3% | 1.8% |
| Small Payroll (1-49) | 84 | 127 | 98 | 2.2 | 2.1 | 2.5 | 1.1 |
| Medium Payroll (50-499) | 93 | 111 | 74 | 1.9 | 1.6 | 2.0 | 2.0 |
| Large Payroll (>500) | 42 | 42 | 42 | 2.5 | 2.3 | 2.4 | 2.7 |
| Goods-Producing | 16 | 42 | 36 | 1.9 | 1.6 | 2.2 | 1.7 |
| Manufacturing | 2 | 10 | 10 | 0.8 | 0.6 | 1.6 | 1.9 |
| Service-Producing | 202 | 238 | 178 | 2.2 | 2.0 | 2.3 | 1.8 |
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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