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Economy in Brief

U.S. ADP Private Payroll Growth Eases
by Tom Moeller  July 5, 2018

The ADP/Moody's National Employment Report indicated that private nonfarm payrolls increased 177,000 (1.8% y/y) during June following a 189,000 May gain, revised from 178,000. A 185,000 rise had been expected in the Action Economics Forecast Survey. Gains in employment recently have decelerated. During the last three months, ADP payrolls have grown an average of 179,000, down from 227,000 averaged in the first three months of the year and 185,000 averaged during 2017. During the last ten years, there has been a 95% 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 29,000 (1.0% y/y) in June down from last year's 56,000 average. Medium-sized payrolls gained 80,000 (2.2% y/y) versus 74,000 per month in 2017. Large-sized payrolls improved 69,000 (2.9% y/y) in contrast to an average of 55,000 last year.

Private service-producing payrolls increased 148,000 (1.8% y/y), on a par with increases earlier this year and throughout 2017. Professional & business services payrolls rose a lessened 33,000 (2.5% y/y), but education & health services employment rose an improved 46,000 (2.0% y/y). Employment in the leisure & hospitality sector increased a steady 32,000 (2.1% y/y). The number of trade, transportation and utilities jobs firmed 24,000 (1.1% y/y). Financial activities jobs gained 7,000 (1.5% y/y). Employment in the information sector declined 2,000 (-0.2% y/y), the second monthly decline this year.

Employment in the goods-producing sector rose 29,000 (2.3% y/y), down from an average 51,000 earlier in the year. The 13,000 increase (3.1% y/y) in construction sector payrolls was slightly slower than averaged last year. Jobs in the factory sector rose a fairly steady 12,000 (1.6% y/y). Higher oil prices strengthened job growth in the natural resource & mining sector by 5,000 (6.7% y/y) and compared to negative readings in 2016.

The ADP National Employment Report data can be found 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 2017 2016 2015
Nonfarm Private Payroll Employment (m/m chg, 000s) 177 189 170 1.8% 1.8% 1.9% 2.3%
 Small Payroll (1-49) 29 46 50 1.0 1.3 1.9 1.9
 Medium Payroll (50-499) 80 90 73 2.2 1.9 1.5 2.3
 Large Payroll (>500) 69 53 47 2.9 2.3 2.7 3.0
Goods-Producing 29 49 37 2.3 1.5 0.8 2.0
  Construction 13 26 15 3.1 3.1 4.3 5.3
  Manufacturing 12 16 14 1.6 0.7 0.2 1.2
Service-Producing 148 140 133 1.8 1.8 2.2 2.3
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