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Economy in Brief

U.S. ADP Private Payroll Gain Disappoints
by Tom Moeller  July 6, 2017

The ADP/Moody's National Employment Report for June indicated that private nonfarm payrolls increased 158,000 (2.0% y/y) following a 230,000 May gain, revised from 253,000. A 189,000 increase had been expected 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 Automatic Data Processing 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 business payrolls increased 17,000 (1.4% y/y) following a 58,000 rise. The weak increase compared to a 79,000 average earlier in the year. Medium-sized payrolls increased 91,000 (2.3% y/y), down from the 100,000 average from January to May. Large-sized payrolls gained a steady 50,000 (2.6% y/y).

Employment in the goods-producing sector remained unchanged (1.7% y/y) for the second month in the last three, down from the 88,000 Q1 average increase. Construction sector payrolls declined 2,000 (+3.3% y/y) versus a 33,000 average monthly gain earlier in the year. Jobs in the factory sector improved 6,000 (0.8% y/y), but the Q2 average monthly increase slowed significantly from 31,000 during Q1.

Private service sector payrolls rose 158,000 (2.0% y/y), below the growth earlier in the year. Professional & business services payrolls rose an improved 69,000 (3.5% y/y). The number of trade, transportation and utilities jobs increased a strengthened 30,000 (1.3% y/y) for the second straight month. Education & health services employment rose a lessened 28,000. The number of leisure & hospitality jobs rose 11,000, down by two-thirds from the increases earlier in the year. Financial activities jobs improved 10,000 (1.9% y/y) and remained nearly the slowest increase of the last four years. Employment in the information sector held steady (1.0% y/y), following three months of decline.

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 Jun May Apr Jun Y/Y 2016 2015 2014
Nonfarm Private Payroll Employment (m/m chg, 000s) 158 230 148 2.0% 1.9% 2.3% 2.2%
 Small Payroll (1-49) 17 58 37 1.4 1.9 1.9 1.8
 Medium Payroll (50-499) 91 111 93 2.3 1.5 2.3 2.8
 Large Payroll (>500) 50 61 18 2.6 2.8 3.0 2.1
Goods-Producing 0 31 0 1.7 0.8 2.0 2.6
  Construction -2 23 -14 3.3 4.1 5.2 4.9
  Manufacturing 6 4 8 0.8 0.2 1.2 1.4
Service-Producing 158 199 148 2.0 2.2 2.3 2.2
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