Global| Jan 04 2018U.S. ADP Private Payroll Growth Strengthens Unexpectedly
by:Tom Moeller
|in:Economy in Brief
Summary
The ADP/Moody's National Employment Report indicated that private nonfarm payrolls rose 250,000 (2.1% y/y) during December, the largest increase since March. The rise followed little- revised increases of 185,000 and 238,000 in [...]
The ADP/Moody's National Employment Report indicated that private nonfarm payrolls rose 250,000 (2.1% y/y) during December, the largest increase since March. The rise followed little- revised increases of 185,000 and 238,000 in November and October. A 185,000 rise had been expected in the Action Economics Forecast Survey. During all of last year, payroll increases averaged 212,000 per month after an average 181,000 in 2016. During the last ten years, there has been a 96% correlation between the change in the ADP figure and the change in nonfarm private-sector payrolls as measured by the Bureau of Labor Statistics.
The Automatic Data Processing Research Institute survey is based on ADP's business payroll transaction system covering 411,000 companies and nearly 24 million employees. The data are processed by Moody's Analytics Inc., then calibrated and aligned with the BLS establishment survey data. The ADP data cover private sector employment only.
Small-sized business hiring in December increased 94,000 (1.4% y/y), above last year's average of 61,000. Medium-sized payrolls gained 100,000 (2.4% y/y), improved versus an average 88,000 in 2017. Large-sized payrolls increased 56,000 (2.8% y/y) versus last year's 63,000 average.
Private service-sector payrolls improved 222,000 (1.9% y/y), the strongest increase since June of last year and up from the 2017 average of 168,000. Professional & business services payrolls surged 72,000 (3.5% y/y), the strongest gain since May. Education & health services employment rose a strong 50,000 (2.0% y/y). The number of trade, transportation and utilities jobs strengthened 45,000 (0.8% y/y), the strongest increase in twelve months. Employment in the leisure & hospitality sector rose 28,000 (2.6% y/y), though that was below last year's 34,000 average. Financial activities jobs surged 19,000 (1.7% y/y), the strongest increase in nine months. Employment in the information sector fell 4,000 (-1.8% y/y), where payrolls have been falling since early 2016.
Employment in the goods-producing sector rose 28,000 (2.7% y/y), the weakest increase since July and down from last year's 44,000 average. Construction sector payrolls increased 16,000 (4.1% y/y), below the 2017 average of 23,000. Jobs in the factory sector rose a tepid 9,000 (1.7% y/y), the weakest increase since July. In the natural resource & mining sector, jobs rose 3,000 (6.1% y/y) following sharp declines in 2015 and 2016. The level of employment there remained down by roughly one-quarter during the last two years.
The ADP National Employment Report data are maintained in Haver's USECON database; historical figures date back to April 2001 for the total and industry breakdown, and back to January 2005 for the business size breakout. The expectation figure is available in Haver's AS1REPNA database.
| ADP/Moody's National Employment Report | Dec | Nov | Oct | Dec Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Nonfarm Private Payroll Employment (m/m chg, 000s) | 250 | 185 | 238 | 2.1% | 2.0% | 1.9% | 2.3% |
| Small Payroll (1-49) | 94 | 53 | 64 | 1.4 | 1.4 | 1.9 | 1.9 |
| Medium Payroll (50-499) | 100 | 92 | 79 | 2.4 | 2.1 | 1.5 | 2.3 |
| Large Payroll (>500) | 56 | 41 | 95 | 2.8 | 2.7 | 2.8 | 3.0 |
| Goods-Producing | 28 | 41 | 41 | 2.7 | 1.9 | 0.8 | 2.0 |
| Construction | 16 | 6 | 17 | 4.1 | 3.6 | 4.1 | 5.2 |
| Manufacturing | 9 | 30 | 23 | 1.7 | 1.0 | 0.2 | 1.2 |
| Service-Producing | 222 | 145 | 197 | 1.9 | 2.0 | 2.2 | 2.3 |
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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