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Economy in Brief

ADP Reports Moderate Growth In Employment
by Tom Moeller  August 3, 2011

Their estimate missed the mark for June, but again, in its latest National Employment Report, the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers, indicated that job growth has firmed. Today's figure showed that the July level of private nonfarm payrolls rose 114,000 after a 145,000 increase, revised from 157,000. The latest gain beat the Action Economics estimate of a 100,000 rise. Regardless, the three-month rate of growth fell to 1.1% (AR) down from February's at 2.4%.

The U.S. Bureau of Labor Statistics will report July payroll employment this Friday. Economists expect a 90,000 worker increase in jobs. For comparison, the June increase of 145,000 in ADP's measure of private nonfarm payrolls was accompanied by a 57,000 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 compiles 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.

A 121,000 increase in service-producing payrolls provided all the growth in the latest ADP estimate. Goods-producing payrolls fell a slight 7,000. Factory sector jobs slipped 1,000. Overall, small-sized payrolls grew 58,000 m/m (1.7% y/y) while medium-sized payrolls rose 47,000 (1.8% y/y). Large payrolls rose a steady 9,000 (0.3% y/y). Construction employment fell 11,000 and the number of financial activities jobs slipped 1,000.

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. The expectations figures are available in Haver's AS1REPNA database.

ADP National Employment Report Jul Jun May Y/Y 2010 2009 2008
Nonfarm Private Payroll Employment (m/m Chg., 000s) 114 145 35 1.5% -1.1% -4.8% -0.6%
  Small Payroll (1-49) 58 80 27 1.7 -0.8 -3.9 0.0
  Medium Payroll (50-499) 47 56 29 1.8 -1.0 -5.6 -0.9
  Large Payroll (>500) 9 9 -21 0.3 -2.0 -5.6 -1.9
Goods Producing -7 24 -11 0.7 -5.1 -12.3 -3.6
  Manufacturing -1 21 -10 1.3 -3.3 -11.3 -3.2
Service Producing 121 121 46 1.7 -0.2 -3.1 0.1
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