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Economy in Brief

U.S. ADP Private Payroll Growth Weakened by Hurricanes
by Tom Moeller  October 4, 2017

The ADP/Moody's National Employment Report indicated that private nonfarm payrolls increased 135,000 (2.0% y/y) during September following a 228,000 August rise, revised from 237,000. ADP indicated that last month's weakness was due in part to storm damage from Hurricanes Harvey and Irma. The increase was the smallest since October. Monthly payroll gains this year have averaged 212,000 per month after averaging 174,000 last year. A 145,000 September rise 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.

Large-sized payrolls improved 79,000 (2.8% y/y), reduced from the 119,000 August gain. Small-sized business payrolls declined 7,000 (+1.2% y/y) after a 43,000 rise. Medium-sized payrolls increased a lessened 63,000 (2.2% y/y) compared to the 92,000 average during the first eight months of 2017.

Employment in the goods-producing sector rose 48,000 (2.3% y/y), about the same as in August. These gains were near the 47,000 average of the first eight months. Construction sector payrolls improved a steady 29,000 (3.7% y/y). Jobs in the factory sector gained a steady 18,000 (1.3% y/y).

Private service sector payrolls increased 88,000 (1.9% y/y), reduced from the 174,000 average from January through August. The number of trade, transportation and utilities jobs declined 18,000 (+0.9% y/y). Employment in the information sector declined 11,000 (-1.2% y/y) where payrolls have been falling since early last year. Financial activities jobs rose just 4,000 (1.7% y/y). The number of leisure & hospitality jobs rose 20,000 (2.3% y/y), the weakest rise since May. Professional & business services payrolls rose 51,000 (3.4% y/y), down from 61,000 in this year's first eight months. Education & health services employment rose a lessened 29,000 (2.0% y/y).

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.

The Labor Market for Recent College Graduates from the Federal Reserve Bank of New York is available here.

ADP/Moody's National Employment Rep Sep Aug Jul Sep Y/Y 2016 2015 2014
Nonfarm Private Payroll Employment (m/m chg, 000s) 135 228 198 2.0% 1.9% 2.3% 2.2%
 Small Payroll (1-49) -7 43 46 1.2 1.9 1.9 1.8
 Medium Payroll (50-499) 63 66 85 2.2 1.5 2.3 2.8
 Large Payroll (>500) 79 119 67 2.8 2.8 3.0 2.1
Goods-Producing 48 47 23 2.3 0.8 2.0 2.6
  Construction 29 21 14 3.7 4.1 5.2 4.9
  Manufacturing 18 24 7 1.3 0.2 1.2 1.4
Service-Producing 88 182 174 1.9 2.2 2.3 2.2
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