How's the Job Recovery?

While MF Global and the situation in Europe significantly reduce the importance of any economic release, I thought I would highlight today's ADP employment figure anyhow.

The chart below outlines the change in goods producing, service providing, and total employment figures going back ten years. Note that over this time there have been no jobs added, while the population has grown roughly 10% (i.e. it looks bad, but it's been even worse).

The good news: service providing jobs (the type that make up the majority of jobs these days) are rebounding

The bad news: goods producing jobs (the type that actually produce stuff) are down almost 25% (yes 25%) since 2001

Source: ADP

ADP Employment Better than Expected

CNN details:

Payroll processing company ADP said private jobs grew rapidly in June -- a figure that was much higher than expected and more than four times higher than the prior month. May's figures were downwardly revised to 36,000 jobs. Economists were expecting a gain of just 60,000 private sector jobs, according to consensus estimates from Briefing.com. Smaller businesses led the charge in June. Small businesses, defined as those with fewer than 50 workers, added 88,000 jobs in June. Medium-size businesses, defined as those with between 50 and 499 workers, gained 59,000.

Don't get me wrong, a better figure is good news, but let's put this in perspective.

Source: ADP

ADP Points to Limited / No Employment Recovery

Marketwatch details:

U.S. private-sector employment fell 10,000 in August, according to the ADP employment report released Wednesday. "The decline in private employment in August confirms a pause in the recovery already evident in other economic data,"said Joel Prakken, chairman of Macroeconomic Advisers, which produces the report from anonymous payroll data supplied by ADP, in a statement. On Friday, the government is scheduled to report nonfarm payrolls for August, and economists polled by MarketWatch are looking for an overall decline of 105,000, including an expected increase of 25,000 jobs in the private sector.

Source: ADP

ADP Employment Shows Weakness

The WSJ details:

Private-sector jobs in the U.S. increased by 13,000 last month, according to a national employment report published by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.

Economists had expected ADP to report a jobs gain of 60,000 for June. The estimated change in employment for May was revised to a gain of 57,000 from an increase of 55,000 first reported.

The ADP survey tallies only private-sector jobs, while the Bureau of Labor Statistics' nonfarm payroll data, to be released Friday, include government workers.

The Census Department had hired hundreds of thousands of temporary workers for the census but began to lay off many of them in June.

As a result, said economists surveyed by Dow Jones Newswires, the BLS will probably report June total payrolls dropped by 110,000, following a jump of 431,000 in May. Among those economists forecasting private-sector jobs within the BLS data, the median projection is for a gain of 110,000.

Source: ADP

ADP Employment... Not Yet "Back in Black"

Peter Boockvar (via The Big Picture) reported pre-release:

While many are waiting for Friday’s Payroll figure to tell them the state of the US labor market, I’m going to rely on today’s ADP report as a better gauge. That is because it is private sector based and thus won’t be distorted by the likely 100k+ adds of government census workers and the “methodology used to construct it” takes out most of the impact of the Feb snow storms and March snapback. Thus, a cleaner number will result and expectations are +40k, the first positive reading since Jan ‘08.

It turns out that 40,000 was a bit optimistic as ADP showed a contraction of another 23,000 jobs. If these figures are to be believed (we will see "official figures" Friday), then we may have to wait for April for the private sector to stop contracting.



Source: ADP

Services Employment Stabilizing

The headline figure that's reported regarding ADP news (per Marketwatch):

According to today's ADP National Employment Report(R), private sector employment decreased by 20,000 in February. The ADP National Employment Report, created by Automatic Data Processing, Inc. (ADP(R)), in partnership with Macroeconomic Advisers, LLC, is derived from actual payroll data and measures the change in total nonfarm private employment each month.

And the corresponding chart.



But hidden in the release is this...

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. This month's ADP Report incorporates revised historical estimates based on the 2010 benchmark revisions to establishment employment published by the Bureau of Labor Statistics on February 6, 2010.

And the revision (vs. last month's release) was as follows:



So, ADP reports almost 1.4 million less people employed than last month, BUT it is important to note that this revision was done only to match that of the BLS (thus, don't expect a similar revision in Friday's national release). This may in part explain why the ADP report has been reporting stronger employment in the services sector, while the ISM services report shows continued contraction more aligned with the BLS. This month is no exception. ISM reports (hat tip Calculated Risk):

Employment activity in the non-manufacturing sector contracted in February for the 26th consecutive month. ISM's Non-Manufacturing Employment Index for February registered 48.6 percent. This reflects an increase of 4 percentage points when compared to the seasonally adjusted 44.6 percent registered in January.

We'll see Friday how this plays out in the BLS figure, but it appears that a slight decline in the services sector is likely, though we are getting close to what appears to be the bottom.

Source: ADP / ISM

ADP Employment... Getting There

Source: ADP

ADP Jobs Down 84,000; Services Jobs Grow

That would be the first positive month for services since March 2008.

Source: ADP