ADP: Decent Gains in Employment in February, But Manufacturing Hiring Still Lags

By March 7, 2013Economy

Automated Data Processing (ADP) reported that nonfarm payrolls rose 198,000 in February, indicating that that nation’s job growth appears to be growing decently in the past four months. Nonfarm private payrolls have risen 225,000 on average from November to February, which is progress from the average increase of 163,000 for 2012 as a whole.

With that said, manufacturing sector job growth still lags behind. Manufacturers added 9,000 additional workers in February, which while better than in January, is still below the pace of one year ago. Manufacturers have added 8,000 workers on average for each of the past four months. This is above the average for 2012 of 6,000 workers, but below the 19,000 average monthly pace of 2011.

The distribution of additional nonfarm payroll workers was more evenly distributed than normal between small (e.g., those with less than 50 employees), medium (50 to 499 employees), and large (500 or more employees) businesses. Smaller firms added 77,000 additional workers, medium-sized entities contributed 65,000, and large businesses hired an additional 57,000 workers.  Using the traditional definition of a small business as one with less than 500 employees, this would suggest that 71.7 percent of the net new jobs were attributed to these firms.

Other industries with job gains in February included: trade, transportation, and utilities (up 45,000); professional and business services (up 35,000); construction (up 21,000); and financial activities (up 7,000). More of the net job increases came in the services industry (up 164,000) than in the goods-producing ones (up 34,000).

Tomorrow, we will receive official government data on employment from the Bureau of Labor Statistics. The consensus estimate is for 155,000 additional nonfarm payroll workers, but I would not be surprised to see a figure closer to 175,000. Manufacturing job gains should be similar to what was reported in this ADP survey.

Chad Moutray is chief economist, National Association of Manufacturers.


Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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