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Economy in Brief

ADP Reports Record Jump In Payrolls
by Tom Moeller  January 05, 2011

In its latest National Employment Report, the payroll processor, Automatic Data Processing (ADP), indicated that the level of private nonfarm payrolls jumped 297,000 m/m during December. The gain exceeded Consensus expectations for a 100,000 increase and it was a record for the series which dates back to 2001.

The U.S. Bureau of Labor Statistics will report December payroll employment on Friday. Economists expect a 145,000 worker increase in jobs. For comparison, the November increase of 92,000 in ADP's measure of private nonfarm payrolls was accompanied by a 50,000 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.

The outsized strength in the ADP report was due to a record 270,000 increase in private service producing payrolls. It was the eleventh consecutive monthly increase. Goods producing payrolls rose for the second month by 27,000 led by a 23,000 in factory sector jobs. Small-sized payrolls grew 117,000 m/m (0.5% y/y) while medium-sized payrolls rose 144,000 (0.9% y/y). Large service-producing payrolls rose 36,000 (0.2% 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 Dec Nov Oct Y/Y 2010 2009 2008
Nonfarm Private Payroll Employment (m/m Chg., 000s) 297 92 79 0.6% -1.2% -4.9% -0.7%
Small Payroll (1-49) 117 49 36 0.5 -1.0 -4.1 -0.1
Medium Payroll (50-499) 144 44 40 0.9 -1.2 -5.7 -0.9
Large Payroll (>500) 36 -1 3 0.2 -1.9 -5.6 -1.8
Goods Producing 27 10 -20 -1.4 -5.6 -12.3 -3.7
 Manufacturing 23 15 -4 0.7 -3.3 -11.1 -3.0
Service Producing 270 82 99 1.0 -0.3 -3.3 0.0
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