March ADP Payroll Report was expected to surprise to the upside. It was a surprise. Still saw March to March growth for all sectors,
ADP Private Sector Payroll Report gives us a first insight into the
jobs market. It is normally released two days prior to the federal
Employment Situation Report. The ADP Payroll Report is comprised
entirely of seasonally adjusted data and does not include Government
Jobs. The headline Non-farm Payroll worker number measures private
sector and government worker growth. It was projected that the annual
growth would exceed 2.10% and that the month to month growth would be
roughly 0.15% to 0.17%. It was thought that prior to the revisions to
last month’s data that we would add between 207,000 and 252,000 workers,
or roughly 229,000 private sector workers. What was reported?
The headline number was 129,000 payroll positions added, far short of expectations. The data for January and February
were revised. The January revision was from 300,000 positions to
264,000. This would have been the first 300,000 payroll number in over a
decade. The advance January value was 213,000, so this is still a
strong number. The February ADP number was 183,000 and is now 197,000.
The net change was a -22,000 positions. The total revisions are still up
by 29,000 positions.
The Annual Growth rate was reported at 2.01%. The
annual growth rate was 2.10%. during February and 1.81% during March
2018, There are a couple of ways to look at the data. We may have seen
peak growth this past Fall. We are growing faster than we were last year
at this time. We have been growing at over 2% since July of 2018. All
would be valid.
All sectors were expected to report payroll growth, based on the annual growth data. All
sectors did grow March to March. The largest gains March to March were
in Natural Resources (N/R) Construction, Professional Business Services
(PBS,) Leisure and Hospitality (LAH,) and Education Health Services
The month to month growth rate stumbled to its lowest level since September of 2017. The month to month growth rate has been consistent during the Month of March at roughly 0.17%. This data does not make sense. We are growing year over year faster than we were last March. The seasonally adjusted growth for Construction, Manufacturing, and Financial services were negative when they were expected to be positive. Three of the fastest growing sectors during March have been Natural Resources, Manufacturing, and Construction. The construction data has shown improvement after the end of the Government Shutdown. All sectors were expected to grow month to month. Watch next month’s revisions.
growth in Leisure and Hospitality, Education and Health Services, and
Trade, Transportation and Utilities (TTU,) may impact the average wage
growth reported this Friday. LAH, EHS, and TTU are three of the
four lowest paid sectors. If they grew and three of the higher paid
sectors declined (Manufacturing, Construction, and Financial Services
decline this month, then the seasonally adjusted wage growth may be
further negatively impacted. This is why this column only uses
non-seasonally adjusted to calculate wage growth. Remember that it is
not great to compare seasonally adjusted data to seasonally adjusted
data from the same data set nonetheless different data sets.
column has written numerous articles regarding the January revisions to
the government data and the February revisions to the ADP data. Was the
ADP data revised lower to better match the disappointing SA CES data
reported from the government? Will the government CES data be revised
higher to better match the ADP data? We will know more this Friday. The
economy is doing better than it was during March 2018.
It’s the Economy.
Categories: It's the Economy