Global| Apr 01 2020U.S. ADP Private Payrolls Decline as Coronavirus Effects Begin
by:Tom Moeller
|in:Economy in Brief
Summary
• Labor market weakness gets underway in March. • Service-sector employment declines, particularly in small businesses
April 1, 2020
• Labor market weakness gets underway in March.
• Service-sector employment declines, particularly in small businesses.
The ADP National Employment Report
indicated that nonfarm private payrolls during March fell 27,000 (+1.3% y/y)
following a 179,000 February increase, revised from 183,000. ADP conducts its
monthly survey during the week that includes the 12th of the month, so it
preceded the stronger layoff activity in recent weeks. The latest figure
compared to a 200,000 decline expected in the Action Economics Forecast Survey.
Small payrolls declined 90,000 (-0.3% y/y) following a fairly
steady 21,000 February gain. Medium-sized payrolls rose 7,000 (1.1% y/y) after a
27,000 rise, which was half the January rise. Large-sized payrolls improved 56,000
(2.2% y/y) after a fairly steady steady131,000 rise. Within industry sectors, employment at goods-producing firms
eased 9,000 (+0.2% y/y) last month after a 12,000 rise, which also was half the
upwardly revised January increase. Construction sector payrolls fell 16,000 last
month (+1.3% y/y), the first decline in nine months. Factory sector employment
improved 6,000 (-0.3% y/y), the first increase in four months. Employment in the
natural resource & mining sector edged 1,000 higher (-2.0% y/y), but was
down versus March 2019. Employment growth in the private service sector declined 18,000
(+1.5% y/y) after a 167,000 February strengthening. Education & health
services jobs improved a steady 48,000 (2.4% y/y). Financial activities payrolls
held steady (1.3% y/y). These figures were offset by a collapse of 37,000 (+0.7%
y/y) in trade, transportation & utilities, the largest decline in ten years.
Leisure & hospitality employment fell 11,000 (+2.1% y/y) after two monthly
increases of roughly 45,000. Employment in professional & business services
weakened 3,000 (+1.8% y/y). Information sector payrolls declined 7,000 (-0.5%
y/y). 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. The ADP National Employment Report data can be found in
Haver's USECON database. Historical figures date back to 2001 for private
employment and the industry breakdown, and 2005 for the business size breakout.
The expectation figure is available in Haver's AS1REPNA database.
ADP/Moody's National
Employment Report
Mar
Feb
Jan
Mar Y/Y
2019
2018
2017
Nonfarm Private Payroll Employment (m/m
chg, 000s)
-27
179
205
1.3%
1.5%
1.8%
1.7%
Small Payroll (1-49)
-90
21
22
-0.2
0.2
0.6
1.1
Medium Payroll (50-499)
7
27
54
1.1
2.0
2.0
1.9
Large Payroll (>500)
56
131
130
2.2
1.9
2.3
2.0
Goods-Producing
-9
12
24
0.2
1.6
2.9
1.8
Construction
-16
19
33
1.3
2.7
4.1
3.7
Manufacturing
6
-4
-5
-0.3
1.0
1.9
0.8
Service-Producing
-18
167
181
1.5
1.5
1.6
1.7
ISM Manufacturing Index Weakens in March
by Tom Moeller April 1, 2020
• Broad-based component declines led by fewer new orders.
• Pricing power falls sharply.
• Most readings move below the break-even level of 50.
Activity in the factory sector weakened just slightly last month despite the onset of the coronavirus. The Institute for Supply Management (ISM) reported that its composite index of manufacturing sector activity for March fell to 49.1 after easing to 50.1 in February. A reading of 50.5 had been expected in the Action Economics Forecast Survey. During the last 15 years, there has been a 68% correlation between the composite index and the quarterly change in real GDP.
The new orders index fell to 42.2, its lowest level since March 2009. The production measure also fell sharply to 47.7, down versus the cycle high of 64.2 in January 2018.
Also declining to its lowest point since May 2009 was the employment measure to 43.8. Just nine percent (NSA) of respondents reported higher payrolls while 21% reported a decline. During the last 15 years, there has been 80% correlation between the employment index and the m/m change in factory sector payrolls.
The supplier delivery measure surged to 65.0 from 57.3, indicating the slowest product delivery speeds since June 2018. Holding fairly steady m/m at 46.9 was the inventory index, but that was down from 53.9 in August 2018.
The prices paid index declined sharply to 37.4 (NSA), its lowest point since January 2016. Only 12% of respondents reported higher prices while 37% reported a decline.
Other series in the ISM report indicated weakness. The export order measure fell to 46.6, the lowest point in six months and down from a high of 62.8 in February 2018. The import series fell to an expansion low of 42.1 and the order backlog measure fell to 45.9 from 50.4 twelve months earlier.
The ISM figures are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's USECON database; further detail is found in the SURVEYS database. The expectations number is available in Haver's AS1REPNA database.
| ISM Mfg (SA) | Mar | Feb | Jan | Mar'19 | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Composite Index | 49.1 | 50.1 | 50.9 | 54.6 | 51.2 | 58.9 | 57.4 |
| New Orders | 42.2 | 49.8 | 52.0 | 55.5 | 51.1 | 61.6 | 62.1 |
| Production | 47.7 | 50.3 | 54.3 | 55.1 | 51.2 | 60.9 | 60.9 |
| Employment | 43.8 | 46.9 | 46.6 | 57.1 | 50.9 | 56.9 | 56.8 |
| Supplier Deliveries | 65.0 | 57.3 | 52.9 | 54.9 | 52.9 | 62.0 | 56.8 |
| Inventories | 46.9 | 46.5 | 48.8 | 50.6 | 49.8 | 52.9 | 50.4 |
| Prices Paid Index (NSA) | 37.4 | 45.9 | 53.3 | 54.3 | 49.1 | 71.7 | 65.0 |
U.S. Light Vehicle Sales Hold Steady in February
by Tom Moeller April 1, 2020
The Autodata Corporation reported that sales of light vehicles during February eased 0.2% (+2.0% y/y) to 17.04 million (SAAR) from 17.07 million in January, revised from 17.05 million. During the last three months, sales averaged 17.00 million units. Sales have been easing since the 2016 sales peak of 17.55 million units.
Sales of light trucks were off 0.1% (+6.6% y/y) at 12.56 million units. Purchases of domestically-made light trucks fell 0.8% (+7.2% y/y) to 9.92 million units following January's 4.4% rise. Sales of imported light trucks improved 2.7% (4.3% y/y) to 2.64 million units after January's 0.4% improvement.
Trucks' share of the U.S. light vehicle market reached a record 73.7%, up from a low of 48.8% during all of 2012.
Auto sales weakened 0.2% (-8.9% y/y) to 4.48 million units. That remained below a peak level of 7.71 million unit sales during all of 2014. Purchases of domestically-produced cars fell 3.3% (-12.7% y/y) to 3.22 million units and added to January's decline. Sales of imported cars strengthened 7.7% (2.4% y/y) to 1.26 million units after rising 0.9% in January.
Imports' share of the U.S. vehicle market rose last month to 22.9% and has been moving sideways for two years. Imports' share of the passenger car market jumped to 28.1%, its highest level in four months. Imports share of the light truck market edged higher to 21.0% and remained up from the 12.0% low in January 2015.
U.S. vehicle sales figures can be found in Haver's USECON database. Additional detail by manufacturer is in the INDUSTRY database.
| Light Weight Vehicle Sales (SAAR, Million Units) | Mar | Feb | Jan | Mar Y/Y % | 2019 | 2018 | 2017 |
|---|---|---|---|---|---|---|---|
| Total | 17.04 | 17.07 | 2.0 | 16.99 | 17.27 | 17.23 | |
| Autos | 4.48 | 4.49 | -8.9 | 4.80 | 5.36 | 6.16 | |
| Domestic | 3.22 | 3.33 | -12.7 | 3.52 | 4.00 | 4.58 | |
| Imported | 1.26 | 1.17 | 2.4 | 1.28 | 1.36 | 1.59 | |
| Light Trucks | 12.56 | 12.57 | 6.6 | 12.18 | 11.92 | 11.07 | |
| Domestic | 9.92 | 10.00 | 7.2 | 9.65 | 9.44 | 9.00 | |
| Imported | 2.64 | 2.57 | 4.3 | 2.53 | 2.48 | 2.07 |
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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