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Economy in Brief

U.S. ADP Private Payrolls Increase Slows
by Tom Moeller  August 2, 2017

The ADP/Moody's National Employment Report indicated that private nonfarm payrolls increased 178,000 during July (1.9% y/y) following a 191,000 June gain, revised from 158,000. May's increase was revised to 233,000 from 230,000. During Q2, monthly gains in employment averaged 190,700 per month after 257,300 in Q1. A 182,000 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 50,000 (1.3% y/y) following a 29,000 rise. Medium-sized payrolls increased 83,000 (2.3% y/y) after a 104,000 rise. Large-sized payrolls improved 45,000 (2.5% y/y), slightly below the gains in the prior two months.

Employment in the goods-producing sector rose 4,000 (1.7% y/y) following a 16,000 increase. These gains were below the Q1 average of 87,700. Construction sector payrolls improved 6,000 (3.2% y/y), down from a 51,300 average monthly gain in Q1. Jobs in the factory sector declined 4,000 (+0.7% y/y), well below the Q1 average of 31,000.

Private service sector payrolls rose 174,000 (2.0% y/y) and roughly equaled the growth earlier in the year. Professional & business services payrolls rose a fairly steady 65,000 (3.5% y/y). Education & health services employment rose 43,000 (2.2% y/y) after a 36,000 gain. The number of trade, transportation and utilities jobs increased 24,000 (1.1% y/y). The number of leisure & hospitality jobs rose 15,000, down by more than half from the increases earlier in the year. Financial activities jobs improved 13,000 (1.9% y/y) and remained nearly the slowest increase of the last four years. Employment in the information sector increased a moderate 8,000 (-0.5% y/y) after a 1,000 rise.

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 Jul Jun May Jul Y/Y 2016 2015 2014
Nonfarm Private Payroll Employment (m/m chg, 000s) 178 191 233 1.9% 1.9% 2.3% 2.2%
 Small Payroll (1-49) 50 29 62 1.3 1.9 1.9 1.8
 Medium Payroll (50-499) 83 104 110 2.3 1.5 2.3 2.8
 Large Payroll (>500) 45 58 61 2.5 2.8 3.0 2.1
Goods-Producing 4 16 27 1.7 0.8 2.0 2.6
  Construction 6 12 21 3.2 4.1 5.2 4.9
  Manufacturing -4 2 0 0.7 0.2 1.2 1.4
Service-Producing 174 175 206 2.0 2.2 2.3 2.2
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