Global| Aug 01 2018U.S. ADP Private Payroll Increase Is Stronger-Than-Expected
by:Tom Moeller
|in:Economy in Brief
Summary
The ADP/Moody's National Employment Report indicated that private nonfarm payrolls increased 219,000 (1.9% y/y) during July following a 181,000 rise in June, revised from 177,000. A 180,000 improvement had been expected in the Action [...]
The ADP/Moody's National Employment Report indicated that private nonfarm payrolls increased 219,000 (1.9% y/y) during July following a 181,000 rise in June, revised from 177,000. A 180,000 improvement had been expected in the Action Economics Forecast Survey. The three-month moving average of ADP payrolls gains has accelerated to 199,000, the quickest speed since April and up from the 185,000 averaged during 2017. 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.
Medium-sized payrolls surged 119,000 (2.3% y/y), the strongest increase since October 2014. Large-sized payrolls improved 48,000 (2.8% y/y) and monthly gains have been slowing since the middle of last year. Small-sized business payrolls increased 52,000 (1.0% y/y), the quickest increase since February and roughly equal to last year's average.
Private service-producing payrolls increased 177,000 (1.8% y/y), the quickest gain in twelve months. Education & health services employment rose a strengthened 48,000 (2.1% y/y) while professional & business services jobs rose 47,000 (2.6% y/y). Employment in the leisure & hospitality sector increased an improved 37,000 (2.1% y/y), more-than-double the growth three months earlier. The number of trade, transportation and utilities jobs firmed a steady 21,000 (1.1% y/y). Financial activities jobs strengthened 15,000 (1.6% y/y), double the gains earlier this year. Employment in the information sector eased 1,000 (-0.4% y/y), the fourth monthly decline this year.
Employment in the goods-producing sector rose 42,000 (2.3% y/y), improved from the gains near the middle of last year. Jobs in the factory sector increased an improved 23,000 (1.8% y/y). Construction employment rose 17,000 (2.9% y/y), but that was half the growth earlier this year. Jobs in the natural resource & mining sector gained 3,000 (6.9% y/y), but recent gains have been slowing.
The ADP National Employment Report data can be found 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 | Jul | Jun | May | Jul Y/Y | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|
| Nonfarm Private Payroll Employment (m/m chg, 000s) | 219 | 181 | 196 | 1.9% | 1.8% | 1.9% | 2.3% |
| Small Payroll (1-49) | 52 | 31 | 49 | 1.0 | 1.3 | 1.9 | 1.9 |
| Medium Payroll (50-499) | 119 | 80 | 94 | 2.3 | 1.9 | 1.5 | 2.3 |
| Large Payroll (>500) | 48 | 69 | 53 | 2.8 | 2.3 | 2.7 | 3.0 |
| Goods-Producing | 42 | 28 | 34 | 2.3 | 1.5 | 0.8 | 2.0 |
| Construction | 17 | 12 | 9 | 2.9 | 3.1 | 4.3 | 5.3 |
| Manufacturing | 23 | 12 | 17 | 1.8 | 0.7 | 0.2 | 1.2 |
| Service-Producing | 177 | 153 | 162 | 1.8 | 1.8 | 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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