ADP November - Bumping Along
The ADP Non-Farm Payroll report gives us an insight as to what we can expect from the Monthly Employment Situation Report that is released two days later. The ADP report can be higher or lower based on the seasonal adjustments to the data. All of the ADP data is seasonally adjusted. There are no non-seasonally adjusted data published, in contrast to the Employment situation report data. This column examined the annual and month to month growth trends for the ADP numbers comparing November to November and October-November trends, The October to November trends projected a strong ADP number - over 300,000. The Annual data was looking even better. The Month to month data projected growth in all sectors except IT. The Year to year data projected huge growth in the Trade, Transportation, Utility Sector, the Leisure Sector, and the Education and Health Sector. So what did the November ADP Private Sector Jobs Report report?
Minor Month to Month Downward Revisions to Construction, Natural Resources, IT and Other Services. The changes to the Construction jobs was negligible - it could be the seasonal factors. The Natural resource drop was "not unprecedented." The same could be said regarding the "Other Services" sector. The Information Technology (IT) sector took a bigger hit than expected.
Year to Year Growth in Every Sector except Information Technology. We saw one of the Best October to November Growth Rates in the Construction Sector, Natural Resource Sector, Manufacturing Sector, Financial Sector, and the Other Services Sector.
The devil is in the seasonal adjustments and the Revisions. The September Data was revised down from 135,000 to 96,000. The October data was unchanged at 235,000 jobs. Will this be seen in the Employment Situation data this Friday?
This report gives us some insight into the possibilities for the November Employment Situation Report. New Construction is up. People are rebuilding after hurricanes and fires. Construction should rise month to month (MTM) and year over year (Y2Y,) non-seasonally adjusted (NSA.) Natural resources should have increased MTM and Y2Y as we see pipelines being built and slightly higher gasoline costs. It still appears that we need to watch the Leisure and Hospitality sector, the Trade Transportation, and Utility (TTU) sector, and the Professional Business Sector (PBS.) Are we seeing service inflation as more companies are hiring more people in the service sector and having to pay more for people to work in this sector? Is it an illegal alien situation? Legal workers requiring more money?
It's the economy.
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