ADP Archives - Shopfloor

ADP: Manufacturers Added 11,000 Workers in November

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ADP said that manufacturers added 11,000 net new workers in November. It was the tenth straight month of employment gains in the sector, rebounding after a weak January. Over that 10-month period, manufacturing firms averaged 11,799 net new hires per month, with an 18,217 average over the past four months. This suggests that manufacturers have begun to step up their hiring a bit in the autumn months, which is promising. Read More

ADP: Manufacturers Added 18,000 Workers in November

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Automatic Data Processing (ADP) reported that the U.S. economy added 215,000 net new jobs in November. This was the highest rate of monthly job creation in one year and was an improvement from the 168,667 average over the prior six months. ADP revised the September and October data upwards, adding 94,000 workers to the total; October had originally been estimated to be a gain of 130,000, but was revised up to 184,000.

In the manufacturing sector, there were an additional 18,000 net new workers in November, the fastest pace since February 2012. Indeed, year-over-year growth in manufacturing employment was just 20,000 net new hires. This suggests continued hesitance to add new workers over much of the past  year. Nonetheless, November’s pickup in hiring was a positive step, mirroring the recent pickup in manufacturing activity since the summer. Still, the gains in hiring remain mostly modest at best.

Other sectors with significant employment increases in November were trade, transportation and utilities (up 45,000), professional and business services (up 38,000), construction (up 18,000), and financial activities (up 5,000). Small and medium-sized firms (e.g., those with less than 500 employees) accounted for 70 percent of the net new job creation in the month.

This report serves as a proxy for the official government employment numbers for November from the Bureau of Labor Statistics, which will be released on Friday. The consensus estimate is for 185,000 additional nonfarm payroll workers added in the BLS data. The ADP release might push those estimates higher to around 200,000 or so, including modest gains in manufacturing hiring.

Chad Moutray is the chief economist, National Association of Manufacturers.

Monday Economic Report – October 21, 2013

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Here is a summary of this week’s Monday Economic Report:

With the government shutdown over, we will begin to receive some of the postponed data that were due to have been released over the past few weeks. The first of these will be the September jobs numbers, due out tomorrow. They are expected to show roughly 160,000 nonfarm payroll workers added last month, with slightly positive manufacturing job growth. As such, it would be similar to the recent ADP employment report, which observed 166,000 net new nonfarm payroll workers and 1,000 additional manufacturing workers created during the month.

In lieu of government data during the federal budget impasse, our view of larger economic trends are somewhat frozen with what we were seeing before October 1. Manufacturing activity was picking up from softness during the spring, but with less robust growth rates. Improvements in the economies of China and the Eurozone were also helping to stabilize those regions, which should help to increase our exports. In addition, manufacturers were mostly positive about growth in 2014. These trends should still hold moving forward, and we will be looking at upcoming data to support this.

However, the government shutdown has had a negative impact on the economy. I estimate—as do many other economists—that rel GDP will now be 0.5 percentage points lower in the fourth quarter than it would have been otherwise. With the budget extended to only January 15, 2014, economic uncertainties will persist, potentially adding downward risks to growth in the first quarter of next year. My current forecast is for growth of 1.8 percent and 2.8 percent for 2013 and 2014, respectively, both of which are lower than I would have predicted a few weeks ago.

The graph attached to this report shows the impact of rising anxieties in financial markets as the nation neared a possible default on its obligations. Yields on one-month Treasury bills rose from 0.03 percent on September 30 to a peak of 0.32 percent on October 15. After the budget deal, these yields fell back to 0.01 percent. These rates are relevant because the U.S. Treasury rolls over a significant portion of its portfolio each month, with higher yields pushing up borrowing costs.

On the manufacturing front, the data released last week were largely mixed, even as they reflected continued expansion. The Philadelphia Federal Reserve Bank reported strong gains in new orders and overall sentiment, even as the composite index eased slightly for the month. Manufacturers in the region were overwhelmingly positive about future activity, with more than two-thirds expecting higher sales during the next six months.

In contrast, the Empire State Manufacturing Survey reported a deceleration of activity in the New York Federal Reserve region resulting largely from uncertainties surrounding the fiscal shutdown and debt ceiling. The forward-looking measures were cautiously optimistic, with hiring levels still skittish. Similarly, the Federal Reserve’s Beige Book found modest to moderate growth nationally, but with concerns about the economic impact of the shutdown and with somewhat weak hiring growth in the manufacturing sector. Meanwhile, the California Manufacturing Survey from Chapman University showed a slower pace of new orders and production expected in the fourth quarter. Some respondents noted a desire for stronger demand. However, production and shipments were predicted to continue to grow modestly—a finding that would be consistent with most of the recent sentiment surveys for the sector.

This week, in addition to new jobs numbers, we will learn more about recent manufacturing activity, with Flash Purchasing Managers’ Index (PMI) data from Markit for the United States, China and the Eurozone. The Kansas City and Richmond Federal Reserve Banks will release new survey data as well. Note that statistical agencies are revising their calendars as they grapple with a backlog of data to release. For a quick guide overview of the new dates, you can periodically check here.

Chad Moutray is the chief economist, National Association of Manufacturers.

one-month tbill yield curve rates - oct2013

ADP: Manufacturing Employment Growth Remains Stalled

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Automatic Data Processing (ADP) said that there were 166,000 net new nonfarm payroll workers in September, slightly higher than the 159,000 added in August. This was mostly in-line with consensus expectations. With official employment numbers from the Bureau of Labor Statistics unlikely to be released on Friday due to the government shutdown, it could be the only look at job creation that we will get this week. Overall, these data suggest only modest growth in employment, with an average of just 162,000 and 163,000 nonfarm workers added in the third quarter and year-to-date, respectively.

Manufacturing employment growth continues to be disappointing. Over the course of the first nine months of 2013, the sector has shed 12,000 workers; whereas, year-over-year growth was up by only 1,000. In the month of September, manufacturers hired an additional 1,000 workers on net, down from 4,000 in August.

Overall, the bulk of the net new jobs added in September came from service-providing sectors, up 147,000 for the month. Trade, transportation, and utilities (up 54,000) and professional and business services (up 27,000) accounted for much of this growth, with financial activities (down 4,000) losing employees. Meanwhile, goods-producing sectors hired an additional 19,000 workers on net, which was largely from construction (up 16,000).

Small and medium-sized businesses (e.g., those with less than 500 employees) contributed 61.6 percent of the net new jobs in September. This was down from nearly 79 percent in August, with the average for the past 12 months being 71.3 percent.

Overall, these numbers show that manufacturers continue to be hesitant to add new workers, with hiring in the larger economy also quite modest. Economic growth so far in 2013 has been less than desired, and while manufacturing leaders are cautious about sales and production in the coming months, there is also a tentativeness to such sentiment. Uncertainty about in the fiscal environment does not help. Instead, we urge policymakers to adopt pro-growth measures that will allow the sector to flourish and, on fiscal matters, to come up with long-term solutions that will solve our deficit and debt challenges.

Chad Moutray is the chief economist, National Association of Manufacturers.


ADP: Manufacturing Employment Declined in July

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The U.S. economy added 200,000 payroll workers on net in July, according to Automatic Data Processing (ADP). This was roughly equal to the 198,000 added in June, and it is a sign that the labor market overall has improved in the summer after weaknesses in the spring months. The average job gain in the first six months of 2013, for instance, was 165,000.

However, the news for the manufacturing sector was less upbeat, with continued slugglishness in hiring. The sector shed 5,000 workers on net in July, down from being unchanged in June. The last month with positive employment gains for the sector was March, somewhat mirroring data from the Bureau of Labor Statistics (BLS) which reported declines in hiring from March to June. The official government data for July from BLS will be released on Friday, with stalled employment for the sector expected. (The consensus estimate for nonfarm payrolls is 185,000.)

The largest monthly employment gains in July were in the professional and business services (up 49,000), trade, transportation and utilities (up 45,000), and construction (up 22,000) sectors. As with previous reports, the bulk of the job creation stemmed from small and medium-sized establishments (e.g., those with less than 500 employees), adding 71 percent of the net new employment for the month.

Chad Moutray is the chief economist, National Association of Manufacturers.

ADP: Manufacturing Employment Down Again in May

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Automated Data Processing (ADP) said that nonfarm payroll growth rose by 135,000 in May, lower than the consensus estimate of 165,000. The pace of hiring has slowed somewhat from earlier in the year. The average employment gain between November and February was 215,000, but that has fallen to just 134,000 in the past three months. This data is consistent with other indicators which have shown increased skittishness on the part of businesses to hire of late.

This is definitely the case for manufacturers. ADP reported that there were 6,000 fewer manufacturing workers on net in May, building off of the loss of 15,000 employees in the sector in April. Employment growth in the sector has been extremely soft since the second half of last year, with negative jobs numbers in seven of the past eleven months. In fact, the estimated employment for manufacturers of 11.904 million in May 2013 is 12,000 workers less than the 11.922 million observed in May 2012.

Note that this data is an estimate based on ADP data, with the Bureau of Labor Statistics (BLS) reporting manufacturing employment of 11.990 million in April 2013. Less important than the total is the trend, and we have seen weakness in the official jobs data for the sector, as well. We get new jobs numbers from BLS on Friday, with a consensus predicting 168,000 nonfarm payroll jobs added. Manufacturing employment was flat in April, and we are not expecting much growth, if any at all, for the sector in May.

Looking specifically at the ADP report, the service-providing sectors added 138,000 net new workers in the month, with the goods-producing sectors shedding 3,000 on net. The largest gains came from the professional and business services (up 42,000) and trade, transportation, and utilities (up 31,000) sectors. Construction hiring rose by 5,000. Roughly 72 percent of the net new jobs came from small and medium-sized businesses (e.g., those with less than 500 employees).

Chad Moutray is chief economist, National Association of Manufacturers.

ADP: Stronger Nonfarm Payrolls, But Manufacturing Employment Falls

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Automated Data Processing (ADP) reported that nonfarm payrolls rose 215,000 in December, its strongest gain since February. The bulk of these jobs stemmed from the service sector (up 187,000), but there was also a healthy contribution from construction (up 39,000). The latter was the result of an improving housing market.

In contrast to these more-positive numbers, manufacturing continues to struggle. Manufacturers lost 11,000 workers on net in December, or 65,000 over the past six months. Indeed, there have been notable declines in production and new orders in the second half of this year, with economic uncertainties and slowing global growth forcing many businesses to pull back. Employment in a number of sentiment surveys have also indicated some hesitance for additional hiring; although, that sentiment might change in the coming months if the economy appears to be firming up.

Medium-sized (e.g., those with 50-499 employees) and larger (e.g., 500 or more employees) businesses accounted for the bulk of the net job increases in December. In the two size groups, there were 102,000 and 87,000 additional employees on net, respectively. Smaller businesses with less than 50 employees contributed 25,000 workers to the total.

In addition to the sectors listed above, other industries with more workers in December included trade, transportation, and utilities (up 53,000), professional and business services (up 37,000), and financial activities (up 14,000).

Tomorrow, we will receive official government data on employment from the Bureau of Labor Statistics. The consensus estimate is for 150,000 net new nonfarm workers, with manufacturing job gains continuing to be weak.

Chad Moutray is chief economist, National Association of Manufacturers.

ADP Reports Modest Employment Gains in September, Weak Manufacturing Job Growth

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Automated Data Processing (ADP) reported that total nonfarm payrolls rose 162,000 in September, below the 189,000 workers added in August. This suggests modest growth in employment last month, and the figure was slightly above expectations, which were around 140,000. The bulk of the net new jobs came from the service sector, which added 144,000 employees on net.

Manufacturers hired just 4,000 more workers on net in September, making it the sixth consecutive month in a row of lackluster job growth for the sector. This corresponds with weaker global growth and rising anxieties about the future of the U.S. market. For the goods-producing sector as a whole (which would add construction, mining, and utilities), there was a net gain of 18,000 employees.

As with past reports, small and medium-sized establishments accounted for most of the net job gains, or 89.5 percent of them in September. In fact, large goods producers added just 1,000 workers for the month.

The ADP numbers are often looked at for clues regarding the official government employment statistics, which will be released on Friday morning. Last month, the Bureau of Labor Statistics reported disappointing jobs numbers, with 96,000 nonfarm payroll jobs added and manufacturers shedding 15,000 workers. While these figures were below the estimates provided by ADP, it did suggest inadequate job gains since the spring, which was similar. Read More

ADP Reports 10,000 Additional Manufacturing Workers in January

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Employers added 170,000 new nonfarm, private payrolls in January, according to Automated Data Processing (ADP). This builds on the solid growth of November and December but represents a fall-off from December’s 292,000 gain. As with last month’s report, most of the increase stemmed from additional service sector employment, which grew by 152,000. Manufacturers hired 10,000 net new workers in January.

Small and medium-sized payrolls (e.g., those with less than 500 employees) accounted for almost all of the net new jobs created in January, continuing a trend seen in past months, as well. In fact, 167,000 net new jobs stemmed from small and medium-sized entities, with larger establishments adding just 3,000. Among goods-producing firms, firms with larger payrolls reduced employment by a net 2,000 workers last month.

These numbers suggest that employment, while lower than the previous two months, continues to grow. The ADP figures were mostly in-line with estimates, with the Bureau of Labor Statistics reporting similar numbers on Friday.

Chad Moutray is chief economist, National Association of Manufacturers

ADP: Manufacturing Employment Increases by 7,000 in November

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Manufacturing employment rose by 7,000 in November, its first increase since June, according to Automated Data Processing (ADP) data released this morning. Total nonfarm payrolls increased by 206,000. This was the largest jump of the year, followed closely by the increases in February and March of 205,000 and 203,000, respectively.

November’s gains came almost entirely from the service sector, which grew by 178,000 net new jobs.

In addition, small and medium-sized payrolls (e.g., those with less than 500 employees) accounted for the bulk of the net new jobs, continuing a familiar trend. This was true for both the goods-producing as well as the service-providing sectors. Of the 206,000 net new jobs created in November, 110,000 stemmed from small establishments with less than 50 employees, and 84,000 flowed from medium-sized entities with 50 to 499 employees.  

These numbers suggest that employment growth has picked up its pace from recent weaknesses. For manufacturers, these results mirror regional sentiment surveys which have found an increased ability to start hiring again. A similar finding will probably be found in Friday’s employment report from the Bureau of Labor Statistics; although, the current consensus forecast for nonfarm payrolls from BLS is closer to a net increase of 120,000 (rather than ADP’s larger figure).

Chad Moutray is chief economist, National Association of Manufacturers.