EconoIndicators / ADP Employment Report

ADP Employment Report At a Glance

Total Nonfarm Private Employment: 116,107,000
Monthly Change: Up 130,000
Products Producing Sector: 22,084,000
Monthly Change: Down 11,000
Service Producing Sector: 94,023,000
Monthly Change: Up 141,000

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Wednesday, January 30, 2008, 8:15 A.M. ET
Nonfarm private employment grew 130,000 from December 2007 to January of 2008 on
a seasonally adjusted basis, according to the ADP National Employment Report™. The
estimated change in employment from November to December was revised down 3,000
to 37,000. January’s increase of 130,000 is consistent with nonfarm private employment
growth that averaged 110,000 during the three-month period from October through
December 2007.
Employment in the service-providing sector of the economy grew 141,000, while
employment in the goods-producing sector declined 11,000, the fourteenth consecutive
monthly decline. Manufacturing employment in January was flat after eighteen
consecutive monthly declines.
Small- and medium-size businesses, defined as those employing fewer than 500 workers,
more than accounted for the increase in total employment in January, adding 122,000
jobs. Employment among larger companies with 500 workers or more increased 8,000.
Two sectors of the economy hit hardest by recent problems in mortgage markets have
been residential construction and financial activities related to home sales and mortgage
lending. In January, construction employment fell 13,000. This is the fourteenth
consecutive monthly decline, bringing the total decline in construction jobs since the
peak in August 2006 to 215,000. Employment in financial activities increased 1,000.
For information on the construction and use of the ADP Report, please visit the
methodology section of the ADP National Employment Report website at
http://ADPemploymentreport.com/methodology.aspx.
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DERIVED FROM ADP PAYROLL DATA
Table 1. Employees on nonfarm private payrolls by selected industry sector and size
(In thousands)
Aug.
2007
Sep.
2007
Oct.
2007
Nov.
2007
Dec.
2007
Jan.
2008p
Change
from:
Dec. 2007 -
Jan. 2008p
Total nonfarm private…………… 115,587 115,648 115,767 115,940 115,977 116,107 130
Small (1-49)……………. 50,760 50,811 50,877 50,949 51,016 51,086 70
Medium (50-499)………. 45,478 45,514 45,569 45,640 45,645 45,697 52
Large (> 499)………….. 19,349 19,323 19,321 19,351 19,316 19,324 8
Goods-producing…………. 22,206 22,168 22,143 22,128 22,095 22,084 -11
Small (1-49)……………. 8,088 8,085 8,085 8,086 8,087 8,085 -2
Medium (50-499)………. 9,807 9,785 9,768 9,756 9,725 9,716 -9
Large (> 499)………….. 4,311 4,298 4,290 4,286 4,283 4,283 0
Service-providing…………… 93,381 93,480 93,624 93,812 93,882 94,023 141
Small (1-49)……………. 42,672 42,726 42,792 42,863 42,929 43,001 72
Medium (50-499)………. 35,671 35,729 35,801 35,884 35,920 35,981 61
Large (> 499)………….. 15,038 15,025 15,031 15,065 15,033 15,041 8
Addendum:
Manufacturing……………… 13,926 13,905 13,893 13,885 13,870 13,870 0
p = preliminary
Seasonally Adjusted
Industry / Size of Payroll
The matched sample used to develop the ADP National Employment Report was derived
from ADP data which, during the last six months of 2007, averaged approximately
392,000 payrolls representing nearly 24 million U.S. employees. This approximately
represents the size of the matched sample used this month.
Notice of Intent to Make Annual Revisions to the ADP National Employment Report™
On February 21, 2008, Automatic Data Processing, Inc, in conjunction with Macroeconomic Advisers, LLC, will
publish annual revisions of the estimates of employment shown in the ADP National Employment Report. These will
reflect:
􀂃 Updated regression estimates used to adjust for historical differences in the variances of the
monthly growth rates of employment reported by the Bureau of Labor Statistics and computed from the
ADP data.
􀂃 Updated estimates of the differences in the historical averages of the growth rates of employment
reported by the Bureau of Labor Statistics and computed from the ADP data.
􀂃 Updated estimates of historical seasonal factors.
􀂃 The reference month for establishing the levels of employment shown in the ADP National Employment
Report will be advanced from March of 2006 to March of 2007.
There will be no revisions to the methodology of computing the estimates of employment shown in the ADP National
Employment Report.
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Chart 1. Growth of Nonfarm Private Employment, All Industries
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Source: Automatic Data Processing, Inc., Macroeconomic Advisers, LLC., Bureau of Labor Statistics
Monthly Percent Change, Seasonally Adjusted
Recession ADP National Employment Report BLS Current Estimate
Simple Correlation = 0.87
Chart 2. Growth of Nonfarm Private Employment, Goods-Producing Industries
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Source: Automatic Data Processing, Inc., Macroeconomic Advisers, LLC., Bureau of Labor Statistics
Monthly Percent Change, Seasonally Adjusted
Recession ADP National Employment Report BLS Current Estimate
Simple Correlation = 0.86
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Chart 3. Growth of Nonfarm Private Employment, Service-Providing Industries
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Source: Automatic Data Processing, Inc., Macroeconomic Advisers, LLC., Bureau of Labor Statistics
Monthly Percent Change, Seasonally Adjusted
Recession ADP National Employment Report BLS Current Estimate
Simple Correlation = 0.80
Chart 4. Growth of Nonfarm Private Employment, by Size of Payroll
-1.0
-0.8
-0.6
-0.4
-0.2
0.0
0.2
0.4
0.6
Jan-01
Apr-01
Jul-01
Oct-01
Jan-02
Apr-02
Jul-02
Oct-02
Jan-03
Apr-03
Jul-03
Oct-03
Jan-04
Apr-04
Jul-04
Oct-04
Jan-05
Apr-05
Jul-05
Oct-05
Jan-06
Apr-06
Jul-06
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Source: Automatic Data Processing, Inc., Macroeconomic Advisers, LLC.
Monthly Percent Change, Seasonally Adjusted
Recession Small Medium Large
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Chart 5. Monthly Changes of Employment in Construction and Financial Activities
-30
-20
-10
0
10
20
30
40
50
Jan.03
Jul.03
Jan.04
Jul.04
Jan.05
Jul.05
Jan.06
Jul.06
Jan.07
Jul.07
Jan.08
Thousands
Construction
Financial
Activities
Source: Automatic Data Processing, Inc., Macroeconomic Advisers, LLC
About the ADP National Employment Report SM
The ADP National Employment Report, sponsored by ADP®, was developed and is
maintained by Macroeconomic Advisers, LLC. It is a measure of employment derived
from an anonymous subset of roughly 500,000 U.S. business clients. During the last six
months of 2007, this subset represented approximately 392,000 U.S. business clients
representing nearly 24 million U.S. employees working in all private industrial sectors.
The data is collected for pay periods that can be interpolated to include the week of the
12th of each month, and processed with statistical methodologies similar to those used by
the U.S. Bureau of Labor Statistics to compute employment from its monthly survey of
establishments. Due to this processing, this subset is modified to make it indicative of
national employment levels; therefore, the resulting employment changes computed for
the ADP National Employment Report are not representative of changes in ADP’s total
base of U.S. business clients.
Empirical analysis performed by Macroeconomic Advisers suggests that the ADP
National Employment Report can be used to develop a forecast of “true” employment that
is superior to those resulting from consensus estimates, survey data, or other models of
employment that do not incorporate the results of the ADP Report.