EconoIndicators / ADP Employment Report

ADP Employment Report At a Glance

Total Nonfarm Private Employment: 116,048,000
Monthly Change: Down 23,000
Products Producing Sector: 21,994
Monthly Change: Down 70,000
Service Producing Sector: 94,054,000
Monthly Change: Up 47,000

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Wednesday, March 5, 2008, 8:15 A.M. ET
Nonfarm private employment declined 23,000 from January to February 2008 on a
seasonally adjusted basis, according to the ADP National Employment ReportTM. The
estimated change in employment from December 2007 to January 2008 was revised
down 11,000 to 119,000. February’s decline of 23,000 signals a deceleration of
employment growth across businesses of all sizes.
Employment in the service-providing sector of the economy grew 47,000, while
employment in the goods-producing sector declined 70,000, the fifteenth consecutive
monthly decline. Manufacturing employment fell 40,000 in February after declining a
revised 3,000 in January, and marked the eighteenth consecutive monthly decline.
Most of the decline in employment during February was accounted for by job losses at
large companies, but there was a notable deceleration of employment growth at
businesses of all sizes. Employment among small-size businesses, defined as those with
fewer than 50 workers, advanced just 15,000 during the month, while employment
among medium-size businesses with between 50 and 499 workers dropped 4,000. This
was the first outright decline at medium-size businesses since June of 2003, when job
growth was still recovering from the last recession. Employment at large businesses with
more than 500 workers declined 34,000.
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 February, construction employment fell 30,000. This is the fifteenth
consecutive monthly decline, bringing the total decline in construction jobs since the
peak in August 2006 to 236,000. Employment in financial activities declined by 5,000.
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.
Notice of Annual Revisions to the ADP National Employment ReportTM
Automatic Data Processing, Inc, in conjunction with Macroeconomic Advisers, LLC, has published the scheduled
annual revisions to the estimates of employment shown in the ADP National Employment Report. Revisions include:
• 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 advanced from March of 2006 to March of 2007.
Note: These revisions are published in accordance with the previously stated schedule of annual benchmark revisions
to the ADP Report. No revisions have been made to the methodology of computing the estimates of employment shown
in the ADP National Employment Report. Visit www.adpemploymentreport.com for details.
DERIVED FROM ADP PAYROLL DATA
Table 1. Employees on nonfarm private payrolls by selected industry sector and size
(In thousands)
Seasonally Adjusted
Change
Industry / Size of Payroll Sep. Oct. Nov. Dec. Jan. Feb. from: Jan.
2007 2007 2007 2007 2008 2008p 2008 - Feb.
2008p
Total nonfarm private…………… 115,615 115,725 115,910 115,952 116,071 116,048 -23
Small (1-49)……………. 50,816 50,879 50,954 51,023 51,087 51,102 15
Medium (50-499)………. 45,428 45,478 45,552 45,558 45,605 45,601 -4
Large (> 499)………….. 19,371 19,368 19,404 19,371 19,379 19,345 -34
Goods-producing…………. 22,145 22,117 22,110 22,077 22,064 21,994 -70
Small (1-49)……………. 8,027 8,024 8,024 8,024 8,020 8,000 -20
Medium (50-499)………. 9,780 9,763 9,756 9,725 9,716 9,687 -29
Large (> 499)………….. 4,338 4,330 4,330 4,328 4,328 4,307 -21
Service-providing…………… 93,470 93,608 93,800 93,875 94,007 94,054 47
Small (1-49)……………. 42,789 42,855 42,930 42,999 43,067 43,102 35
Medium (50-499)………. 35,648 35,715 35,796 35,833 35,889 35,914 25
Large (> 499)………….. 15,033 15,038 15,074 15,043 15,051 15,038 -13
Addendum:
Manufacturing……………… 13,826 13,812 13,808 13,792 13,789 13,749 -40
p = preliminary
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.
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
Monthly Percent Change, Seasonally Adjusted Monthly Percent Change, Seasonally Adjusted
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
Chart 1. Growth of Nonfarm Private Employment, All Industries
RecessionADP National Employment Report
Jul-06
BLS Current Estimate
0.6
Simple Correlation = 0.87
0.4
0.2
0.0
-0.2
-0.4
-0.6
-0.8
-1.0
Oct-06
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Source: Automatic Data Processing, Inc., Macroeconomic Advisers, LLC., Bureau of Labor Statistics
Chart 2. Growth of Nonfarm Private Employment, Goods-Producing Industries
Recession
ADP National Employment Report
BLS Current Estimate
0.6
Simple Correlation = 0.85
0.4
0.2
0.0
-0.2
-0.4
-0.6
-0.8
-1.0
Source: Automatic Data Processing, Inc., Macroeconomic Advisers, LLC., Bureau of Labor Statistics
Monthly Percent Change, Seasonally Adjusted Monthly Percent Change, Seasonally Adjusted
Jan-01
Apr-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
Chart 3. Growth of Nonfarm Private Employment, Service-Providing Industries
RecessionADP National Employment Report BLS Current Estimate
0.6
Simple Correlation = 0.79
0.4
0.2
0.0
-0.2
-0.4
-0.6
-0.8
-1.0
Jul-01
Jan-07
Apr-07
Jul-07
Oct-07
Jan-08
Source: Automatic Data Processing, Inc., Macroeconomic Advisers, LLC., Bureau of Labor Statistics
Chart 4. Growth of Nonfarm Private Employment, by Size of Payroll
Recession
Small
Medium
Large
0.6
0.4
0.2
0.0
-0.2
-0.4
-0.6
-0.8
-1.0
Source: Automatic Data Processing, Inc., Macroeconomic Advisers, LLC.
Thousands Chart 5. Monthly Changes of Employment in Construction and Financial Activities
50
40
30
20
Financial
Activities
10
0
-10
-20
Construction
-30
-40
Jan.03 Jul.03 Jan.04 Jul.04 Jan.05 Jul.05 Jan.06 Jul.06 Jan.07 Jul.07 Jan.08
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.
For a description of the underlying data and the statistical properties of the series, please
see “ADP National Employment Report: Development Methodology” at
http://ADPemploymentreport.com/methodology.aspx.
For a full schedule of future releases, please visit: www.ADPemploymentreport.com
Media contacts: ADP Public Relations: 973-974-7612
Macroeconomic Advisers: 314-721-4747
Technical information: 314-721-4747
www.ADPemploymentreport.com
The ADP National Employment Report is a trademark and service mark of ADP of North
America, Inc.