ADP Report: Rate Of Job Loss Slowed During April

Perhaps the labor market showed a sign of improvement during April. That could be the implication of the latest report from the payroll processor ADP in their latest National Employment Report. It indicated that private nonfarm payrolls fell 491,000 last month after a 708,000 decline during March which was revised shallower from the initial estimate of a 742,000 drop. The latest reading was the fifteenth consecutive monthly decline. However, the annualized rate of decline in payrolls eased somewhat to 6.5% during the last three months. The U.S. Bureau of Labor Statistics will report payroll employment this Friday. For comparison, March's 708,000 worker decline in ADP's measure of private nonfarm payrolls was accompanied by a 658,000 worker decline in the BLS measure of private sector payrolls. According to ADP and Macro Advisers, the correlation between the monthly percentage change in the ADP estimate and that in the BLS data is 0.90. ADP reported that last month medium sized payrolls fell 231,000 (-4.9% y/y) followed by a 183,000 (-3.6% y/y) worker decline in small sized payrolls. Large payrolls fell by 77,000 (-4.9% y/y). In the goods producing sector there were 262,000 fewer jobs in April (-11.0% y/y). Medium-sized payrolls fell 125,000 (-11.5% y/y) followed by a 91,000 (-10.2% y/y) shortfall in small-sized payrolls. Large payrolls fell 46,000 (-11.2% y/y). In the manufacturing sector alone, payrolls fell 159,000 (-10.9% y/y). It has fallen in almost every month since 2001. Employment in the service producing industry continued to fall sharply during April. The 229,000 (-2.8% y/y) decline was the thirteenth consecutive monthly decline. Medium-sized service payrolls fell 106,000 (-3.1% y/y) and small-sized payrolls were off 92,000 (-2.4% y/y). Large service producing payrolls dropped by 31,000 (-3.0% y/y). ADP compiled the estimate from its database of individual companies' payroll information. Macroeconomic Advisers, LLC, the St. Louis economic consulting firm, developed the methodology for transforming the raw data into an economic indicator. The ADP National Employment Report data is maintained in Haver's USECON database; historical figures date back to December 2000. The figures in this report cover only private sector jobs and exclude employment in the public sector, which rose an average 11,083 during the last twelve months.

The full ADP National Employment Report can be found here, and the ADP methodology is explained here.

LAXEPA@USECON	April	March	Y/Y	2008	2007	2006
Nonfarm Private Payroll Employment (m/m Chg.)	-491,000	-708,000	-4.3%	-0.4	1.2%	2.0%