July ADP Private Sector Payroll Report Reveals Stregnth
How will this compare to the Total Private Sector and Non-Farm Payroll Data?
July is usually peak jobs month, according to the Current Population Survey (CPS) Jobs and Unemployment Data. The non-seasonally adjusted CPS data normally reveals peak levels of full-time jobs during July. Last year there was a spike during the Christmas rush that surpassed the July level. The headline "jobs number" is actually the seasonally adjusted (SA) Current Employment Statistics (CES) worker and wage data. This CES data is similar to the SA ADP Private Sector Payroll data except the headline SA CES number is the non-farm payroll data, which includes public sector workers. It is for this reason, and the situation that seasonal factors change sector to sector, month to month and data set by data set that the headline SA ADP Private Sector Payroll number rarely aligns with the SA CES Non-Farm Worker and Wage data. What was reported in the July ADP report? How did the data come out?
Month to Month trends projected payroll gains in all sectors except Information and Other Services. The largest month to month gains, as a percentage, were expected in Construction, Natural Resources (M/L,) Professional Business Services (PBS,) Leisure and Hospitality (LAH,) and Manufacturing. Month to month growth was expected in the 0.12% to 0.16% range or between 155,000 and 206,000 payroll positions added this month. We grew at 0.12% and added 156,000 private sector payroll positions
We saw month to month growth in all sectors except Information and Natural Resources (M/L.) The largest growth rates were in PBS, Construction, LAH, EHS, and Financial Services (FIRE.) The drop in M/L was unexpected, not uncommon.
We saw July to July growth in all sectors except IT and Natural Resources (M/L.) July to July we expected to see growth in all sectors except Information. The growth sectors were expected to be in M/L, Construction, PBS, LAH, and Education and Health Services (EHS.) It was possible that we would see 1.75% annual growth this month. We saw growth of 1.73%. This is still better than what was reported during December of 2016 and September 2017.
We saw July to July Growth in all sectors except IT and Natural Resources. The M/L number was unexpected, not impossible. We saw the largest growth rates in Construction, Other Services (OS,) EHS, LAH, and Manufacturing. LAH, and Manufacturing.
There were upward revisions to the May ADP Payroll number and the June ADP Payroll Number. The May number was originally just 27,000 positions. This was revised to 41,000 last month and 46,000 this month. This is still a weak number. The June data was originally 102,000 and is now 112,000. This means that 15,000 positions were added to the economy in addition to the 156,000 that were reported, or 171,000. This is the 113th consecutive month of ADP Payroll expansion. (The ADP data can be found on their website.)
What does this mean for Friday's July "Jobs" Report? The July Employment Situation Report Forecast Article was projecting some of the same patterns with growth all sectors, seasonally adjusted, month to month and July to July. It was thought that largest growth rates would be in Mining and Logging, Construction, Manufacturing, Professional and Business Services, and Education and Health Services. We may see weakness in the M/L data and the IT data. If the private sector number is 156,000 and the SA Government data is positive, as expected, then the NFP data should be closer to 200,000 than 150,000.
It's the Economy.