The ADP Payroll Reported Strength
The Current Employment Statistics Data is In Agreement with ADP, more or less.
The monthly employment situation report, or Jobs Report, is created using two different data sets: the Current Population Survey (CPS) Jobs and Unemployment Data and the Current Employment Statistics (CES) Worker and Wages data. The two data sets have seasonally adjusted and non-seasonally adjusted components. The seasonal factors change by data set, category, month and year. The seasonally adjusted (SA) and non-seasonally adjusted (NSA) CES data point to growth in all sectors. The CPS data has some differences between the NSA and SA data.
The Jobs Report Forecast Article " April Jobs Report Should Fire on All Cylinders" made a number of projections regarding the Current Employment Statistics. The Non-seasonally Adjusted CES worker data has been growing by at least 1.88% since April of 2018. It was expected to grow between 1.91% and 2.00% this month. The Non-seasonally adjusted Month to Month Growth was expected to surge up to 1.00%. The Non-Seasonally Adjusted data is projecting growth in all sectors from March to April and from April 2018 to April 2019. The Seasonally Adjusted month to month data is projecting growth in all sectors month to month and April to April. Wages were expected to jump.
The Jobs Report article also made projections regarding the Current Population Survey Data. It was projected that we could see one million full-time jobs added to the economy during April. The Net Seasonally Adjusted CPS data could be slight gain or a slight loss. Non-seasonally Adjusted Unemployment was expected fall and seasonally adjusted unemployment was also expected to edge lower. Multiple Job Workers to drop from March 2019 level and increase from April 2018 Level
Non-seasonally adjusted we grew at 1.97% annually and 0.83% Month to Month. If you look at the graph from 1981 through April 2019 you can see that "all recessions" are jobs (worker) recessions. The Annual rate of growth has moved higher from 1.69% during April 2017 to 1.78% during April 2018 to 1.97% during April 2019. If you examine the April only data you will see that April growth was negative during April 2008, April 2009, and April 2010.
How strong was the month to month growth? The Month to Month Growth and the Seasonal Factor used to covert the non-seasonally adjusted data to the reported seasonally adjusted data you will see that this growth could have been reported lower than it was reported. The non-seasonally adjusted CES non-farm payroll (NFP) worker data jumped by 1.126 million workers. The private sector number jumped 1.060 million. This is not what is reported. The NFP data grew 263,000 and the private sector was reported as growing 236,000 seasonally adjusted workers.
All but one sector grew month to month. All but one sector grew April to April. Mining and Logging dropped month to month 746,000 to 743,000 workers while increasing from 714,000 workers last April. Information grew from 2.804 million to 2.807 million month to month and dropped from 2.823 million to 2.807 million April to April. The good news is that all sectors saw wages rise annually, and only other Services saw wages remain static from March. Only Mining and Logging saw hour rise month to month and April to April. Many hands make light work. More will be detailed in the "Wages and Workers Article."
The seasonal factor was the highest for April since 2008. A higher seasonal factor skews the jobs created higher than it would be reported if the factor was lower. If the 2018 seasonal factor was used then this number would have been 228,000. If the 2017 factor was used then it would be 226,000. Please take note that the 2017 value was 194,000 and 2018 was 171,000 after the revised data was released.
The Current Population Survey Data painted a different picture. We "only" saw 393,000 full-time jobs and 124,000 part-time jobs created during April, Non-seasonally adjusted. We saw the unemployment level fall by 995,000 workers. The CPS and CES data are out of synchronization, again. When the jobs created is lower than the number of unemployed workers dropping out of the unemployment ranks then the participation rate drops.
The Unemployment Rate Dropped to a level not seen during April Since April 1969. The Unemployment Level, the number of unemployed workers, dropped to a level not seen since April 2000. The graphics for this data can be found here.
What is happening to the missing participants? The Participation rate is up from when President Trump Took office even with the unemployment rate being down. Remember that unemployed workers are participants. The April Effective Unemployment rate is the lowest that it has been since April 2008. If we had the same participant rate that we had during April 2000 then we would have 11 million more workers. If you examine the Month 27 data for Former Presidents Reagan, Clinton, George W Bush and President Trump, you will find that President Trump has overseen the creation of more full-time jobs than the prior Presidents combined. You will also note that only President Trump and former President Clinton oversaw the reduction in unemployment during their first 27 months in office. The data will be analyzed further in the "Five Presidents at 27 Months" article.
There are many other ways to examine this data. How are men and women doing in this economy? Which age groups are doing better in this economy? Which sectors are doing better? Which sectors are growing more workers? Which sectors are seeing wages climb the most and the least? The data did not quite dovetail with expectations. This is the reason that the reports are written and analyzed. Full-time jobs are replacing part-time jobs. Wages and workers are rising. This should bode well for second quarter GDP.
It is interesting to note that the ADP payroll data reported a decline in moth Natural Resources (M/L) and IT month to month and all sectors up April to April. The month to month growth, as a whole was lower for ADP and the annual growth rate was higher for ADP than the CES data.
It's the Economy.