Global| Jun 01 2011ADP Reports Reduced Forward Momentum In The Labor Market
by:Tom Moeller
|in:Economy in Brief
Summary
In its latest National Employment Report, the payroll processor Automatic Data Processing (ADP) and economic consultants Macroeconomic Advisers, indicated that the May level of private nonfarm payrolls rose just 38,000 after a 177,000 [...]
In its latest National Employment Report, the payroll
processor Automatic Data Processing (ADP) and economic
consultants Macroeconomic Advisers, indicated that the May
level of private nonfarm payrolls rose just 38,000
after a 177,000 April increase, revised from 179,000. The
latest gain fell well short of Action Economics' expectation
for a 180,000 increase. It was the smallest increase since
September of last year and lowered three-month growth to 1.6%
(AR) versus the February peak of 2.4%.
The U.S. Bureau of Labor Statistics will report May payroll employment on Friday. Economists expect a 190,000 worker increase in jobs. For comparison, the April increase of 177,000 in ADP's measure of private nonfarm payrolls was accompanied by a 268,000 rise in the BLS measure of private sector jobs. 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 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.
Slower job growth was logged in all of the ADP categories. A 48,000 gain in service-producing payrolls was roughly one-third the recent increases while goods-producing payrolls fell for the first month since October. Factory sector jobs fell 9,000. Overall, small-sized payrolls grew 27,000 m/m (1.5% y/y) while medium-sized payrolls rose 30,000 (1.7% y/y). Large payrolls fell 19,000 (+0.2% y/y). Construction employment fell 8,000 and the number of financial activities jobs slipped 6,000.
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. The ADP methodology is explained here. The expectations figure is available in Haver's AS1REPNA database.
| ADP National Employment Report | May | Apr | Mar | Y/Y | 2010 | 2009 | 2008 |
|---|---|---|---|---|---|---|---|
| Nonfarm Private Payroll Employment (m/m Chg., 000s) | 38 | 177 | 203 | 1.3% | -1.1% | -4.8% | -0.6% |
| Small Payroll (1-49) | 27 | 84 | 97 | 1.5 | -0.8 | -3.9 | 0.0 |
| Medium Payroll (50-499) | 30 | 83 | 85 | 1.7 | -1.0 | -5.6 | -0.9 |
| Large Payroll (>500) | -19 | 10 | 21 | 0.1 | -2.0 | -5.6 | -1.9 |
| Goods Producing | -10 | 36 | 38 | 0.5 | -5.1 | -12.3 | -3.6 |
| Manufacturing | -9 | 20 | 36 | 1.1 | -3.3 | -11.3 | -3.2 |
| Service Producing | 48 | 141 | 165 | 1.5 | -0.2 | -3.1 | 0.1 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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