Tag: ADP Employment

ADP Says Hiring is Weak, Manufacturers Lost Workers in April

Automated Data Processing (ADP) said that nonfarm payroll growth was week in April, up just 119,000 for the month. This was the slowest pace of hiring since September. In the manufacturing sector, employment growth turned negative for the sixth time in the past 10 months. This is consistent with other recent surveys which have found manufacturing activity slowing down in April, with hiring remaining skittish. To illustrate just how soft the employment market is for manufacturers, there were 6,000 fewer net new employees in the sector year-over-year, according to ADP.

Note that data on net job gains from ADP differ somewhat from the official government data provided by the Bureau of Labor Statistics (BLS).  As noted in the last BLS report, manufacturing added 77,000 net new workers from March 2012 to March 2013. This was higher than the ADP estimate. With that said, there is definitely one similarity: manufacturing hiring remains well below its potential, with just 4 percent of the net new jobs created in the past 12 months coming from the sector.

New data on April employment will come out on Friday, with a consensus estimate of 150,000 nonfarm payroll workers being added and manufacturing job growth expected to be weak at best.

Looking specifically at the ADP report, the service-providing sectors added 113,000 of the net new workers in the month, or all but 6,000 of them. Small and medium-sized businesses (e.g., those with less than 500 employees) accounted for 64 percent of the net new jobs added in April. Sectors with positive job growth in the month included trade, transportation, and utilities (up 29,000); professional and business services (up 20,000); construction (up 15,000); and financial activities (up 7,000).

Chad Moutray is chief economist, National Association of Manufacturers.

 

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

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.

 

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Manufacturers Continue to Lose Workers in Latest ADP Data

Automated Data Processing (ADP) reported that total nonfarm payrolls rose 158,000 in October, higher than the 114,000 workers added in September. This month’s report marks the beginning of a new partnership with Moody’s Analytics and a new methodology. (Using the old methodology and partner, September’s net hiring according to ADP was estimated to be 162,000.) The October increase stemmed mostly from additional service sector workers, which increased by a net 144,000.

The goods-producing sectors added just 14,000 workers, mostly from construction which was up 23,000. The manufacturing sector continues to be weak, shedding 8,000 workers. Slowing global sales and anxieties about the future of the U.S. political and economic environment have taken a toll.

Tomorrow, we will get official employment numbers from the Bureau of Labor Statistics. In the past two months, BLS has reported that manufacturers have lost 38,000 workers on net. Today’s ADP numbers suggest that the BLS figures might be equally disappointing, with the new ADP data suggesting a loss of 42,000 workers in the past four months.

One other facet of the new methodology is that it breaks down the net job gains by greater firm size classifications. The largest increases were seen among firms with more than 1,000 employees, as they added 69,000 net new workers. Firms with 500 to 999 employees contributed another 12,000, bringing the total increase in employment for large businesses to 81,000 for the month. Still, small and medium-sized businesses, with less than 500 employees, added 77,000 net new workers, with 50,000 of those stemming from businesses with less than 50 employees.

Chad Moutray is chief economist, National Association of Manufacturers.

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