Global| Jun 02 2016U.S. ADP Report Shows Moderating Job Growth
by:Tom Moeller
|in:Economy in Brief
Summary
The ADP/Moody's National Employment Report indicated that nonfarm private sector payrolls rose 173,000 during May following a 166,000 April rise, revised from 156,000. These gains compare to an average of 200,000 during Q1'16 and [...]
The ADP/Moody's National Employment Report indicated that nonfarm private sector payrolls rose 173,000 during May following a 166,000 April rise, revised from 156,000. These gains compare to an average of 200,000 during Q1'16 and 219,000 in Q4'15. The peak quarterly increase occurred in Q2'15 at 230,000. The latest roughly matched expectations for a 170,000 rise in the Action Economics Forecast Survey. 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 ADP 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 businesses led last month's hiring slowdown with a 76,000 rise (2.0% y/y) after a 101,000 gain. These increases were down from the high of 123,000 averaged in Q2'15. A 63,000 increase (1.8% y/y) in hiring of medium-sized businesses was better than the 39,000 April increase, but was less than the 105,000 averaged in Q4'14. Large-sized businesses posted a 34,000 increase in jobs after a 25,000 rise, but these gains compare to 67,000 averaged in Q4'15.
Service-producing payrolls increased 175,000 after a 173,000 rise. In Q2'15 growth averaged 221,000 per month. Professional & business payrolls rose a diminished 43,000, down from 65,000 in Q2'15. Trade, transportation & utilities growth also slowed to 28,000 from a 59,000 high, but financial activities growth was fairly stable at 13,000.
Goods-producing jobs declined 1,000 after a 7,000 drop. The peak for growth came in Q4'15 with a 16,000 average monthly increase. The construction industry added 13,000 jobs after a 14,000 increase, both below last quarter's average of 23,000. Hiring in the factory sector declined 3,000, down for the fourth straight month.
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 | May | Apr | Mar | May Y/Y | 2015 | 2014 | 2013 |
|---|---|---|---|---|---|---|---|
| Nonfarm Private Payroll Employment (m/m chg, 000s) | 173 | 166 | 201 | 2.0% | 2.3% | 2.2% | 1.9% |
| Small Payroll (1-49) | 76 | 101 | 93 | 2.0 | 2.6 | 2.1 | 1.9 |
| Medium Payroll (50-499) | 63 | 39 | 68 | 1.8 | 2.3 | 2.8 | 2.2 |
| Large Payroll (>500) | 34 | 25 | 40 | 2.4 | 1.7 | 1.6 | 1.5 |
| Goods-Producing | -1 | -7 | 9 | 0.5 | 1.8 | 2.4 | 1.8 |
| Construction | 13 | 14 | 20 | 3.6 | 4.5 | 4.7 | 3.7 |
| Manufacturing | -3 | -10 | -1 | 0.0 | 1.1 | 1.3 | 0.8 |
| Service-Producing | 175 | 173 | 192 | 2.3 | 2.4 | 2.2 | 1.9 |
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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