Economy
ADP Sets Muted Tone for Department of Labor Payrolls Report
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If economists and investors were hoping for a super-strong payrolls report from the U.S. Department of Labor this Friday, their hopes may have just been muted by the ADP Payrolls report for the month of August. ADP reported that private sector payrolls increased by 177,000 jobs from July to August.
Dow Jones (Wall Street Journal) was calling for 180,000. Bloomberg’s consensus estimate was 175,000, and its Econoday range was 145,000 to 190,000.
Goods-producing employment was down by 6,000 jobs in August, following July losses of 5,000. ADP showed that the construction industry lost 2,000 jobs, following July losses of 5,000 jobs. Manufacturing jobs were flat in August, after gaining 5,000 in July.
Of the 177,000 total private sector gains, the breakdown was sown as follows:
- Small businesses added 63,000 payrolls.
- Midsized businesses added 44,000.
- Large businesses added 70,000.
ADP showed that the service-providing sector’s employment rose by 183,000 jobs in August, lower than the 199,000 jobs added in July. Professional and business services were up 53,000 jobs, down from July’s 70,000. Trade/transportation/utilities increased by 26,000 jobs in August, down from 31,000 jobs in July. Financial activities added 15,000 jobs, up from July’s gain of 13,000 jobs.
Two quotes describe ADP’s report for August:
- Mark Zandi, chief economist of Moody’s Analytics: “The American job machine continues to hum along. Job creation remains strong, with most industries and companies of all sizes adding solidly to their payrolls. The U.S. economy will soon be at full employment.”
- Ahu Yildirmaz, vice president and head of the ADP Research Institute: “Job growth in August was stable and consistent with levels from previous months as consumer conditions improve. Continued strong growth in service-providing jobs is offset by weakness in goods-producing areas.”
The August ADP National Employment Report is derived from ADP’s actual payroll data. It measures the change in total nonfarm private employment each month on a seasonally adjusted basis.
Again, this may mute expectations for a strong payrolls and employment report from the Labor Department due on Friday. Bloomberg is calling for August to have added 175,000 in nonfarm and 179,000 in private sector payrolls.
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