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Economy in Brief

ADP Report Indicates Firmest Job Growth Since 2007
by Tom Moeller   December 01, 2010

In its latest National Employment Report, the payroll processor, Automatic Data Processing (ADP), indicated that the level of private nonfarm payrolls rose 93,000 m/m during November. Upward revisions to earlier monthly figures show modest positive growth during the last twelve months versus the previous indication of a slight decline. The latest gain exceeded Consensus expectations for a 58,000 increase.

The U.S. Bureau of Labor Statistics will report November payroll employment on Friday. Economists expect a 142,000 worker increase in jobs. For comparison, the October increase of 82,000 in ADP's measure of private nonfarm payrolls was accompanied by a 159,000 rise in the BLS measure of private sector jobs. According to ADP and Macro-Advisers, the correlation between the monthly percentage change in the ADP estimate and that in the BLS data is 0.90. ADP compiled the estimate from its database of individual companies' payroll information. Macroeconomic Advisers, LLC, the St. Louis economic consulting firm, developed the methodology for transforming the raw data into an economic indicator.

For the first month since early-2007, goods producing employment rose. The modest 14,000 gain lessened the y/y decline to 2.0%. At their worst, goods producing employment fell 334,000 during February of last year. In the manufacturing sector alone payrolls also rose 16,000 (0.1% y/y). Goods producing small payrolls rose 5,000 (-3.3% y/y) while medium-sized payrolls rose 13,000 (-0.8% y/y). Large-sized payrolls slipped another 4,000 (-2.2% y/y). Construction employment slipped 3,000. The greatest monthly drop of 120,000 was logged during March of 2009. Financial activities jobs were unchanged.

ADP reported that private service-producing industry employment rose 79,000 for the tenth consecutive monthly rise. Small-sized payrolls grew 49,000 m/m (0.8% y/y) while medium-sized payrolls rose 24,000 (0.7% y/y). Large service-producing payrolls inched up 6,000 (0.3% y/y).

The ADP National Employment Report data is maintained in Haver's USECON database; historical figures date back to December 2000. The figures in this report cover only private sector jobs and exclude employment in the public sector. The ADP methodology is explained here.

ADP National Employment Report Nov. Oct. Sept. Y/Y 2009 2008 2007
Nonfarm Private Payroll Employment (m/m Chg., 000s) 93 82 29 0.2% -4.9% -0.7% 1.1%
  Small Payroll (1-49) 54 40 21 0.2 -4.1 -0.1 1.8
  Medium Payroll (50-499) 37 38 11 0.4 -5.7 -0.9 1.0
  Large Payroll (>500) 2 4 -3 -0.2 -5.6 -1.8 -0.2
Goods Producing 14 -22 -27 -2.0 -12.3 -3.7 -1.1
  Manufacturing 16 -5 -6 0.1 -11.1 -3.0 -1.7
Service Producing 79 104 56 0.7 -3.3 0.0 1.7
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