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Economy in Brief

U.S. ADP Reports Moderate Increase in Hiring
by Tom Moeller  February 3, 2016

The ADP/Moody's National Employment Report indicated that nonfarm private sector payrolls rose 205,000 during January following a 267,000 December increase, revised from 257,000. The latest gain was firmer than expectations for a 190,000 rise in the Action Economics Forecast Survey. Since November, payrolls have risen at a 2.3% annual rate. During the last ten years, there has been a 97% 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, not government.

Medium-sized businesses led last month's job growth with an 82,000 rise (1.8% y/y), the largest increase in twelve months. Small business hiring strengthened 79,000 (2.2% y/y) after a 101,000 improvement. Amongst large-sized employers, payrolls rose 44,000 (2.0% y/y), the weakest gain since October.

Service industry hiring moderated. A 192,000 increase (2.3% y/y) was the weakest rise in three months. Payrolls in professional & business services increased a lessened 44,000 (2.4% y/y) while employment in trade, transportation & utilities industries improved a steady 35,000 (1.7% y/y). The number of financial activities jobs rose an improved 19,000 (2.0% y/y), the strongest rise since March 2006.

The pace of hiring in the goods-producing sector of the economy slackened to 13,000 (0.5% y/y) following a strong 30,000 rise. Construction sector employment increased a firm 21,000 (4.0% y/y) while factory sector jobs remained unchanged (-0.1% y/y) after two months of modest increase.

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 Jan Dec Nov Jan Y/Y 2015 2014 2013
Nonfarm Private Payroll Employment (m/m chg, 000s) 205 267 201 2.0% 2.3% 2.3% 1.9%
 Small Payroll (1-49) 79 101 70 2.2 2.5 2.1 1.9
 Medium Payroll (50-499) 82 77 58 1.8 2.2 2.8 2.2
 Large Payroll (>500) 44 88 74 2.0 1.9 1.8 1.6
Goods-Producing 13 30 -1 0.5 1.8 2.3 1.7
  Construction 21 31 6 4.0 4.8 4.6 3.5
  Manufacturing 0 4 3 -0.1 0.8 1.2 0.9
Service-Producing 192 237 202 2.3 2.4 2.3 2.0
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