ADP Employment: Notably Lower Gains in July, June Higher
August 5, 2020
Bottom Line: ADP reported just 167k new payroll jobs were created in July. But the June was tally was revised sharply higher from 2.37 million to 4.3 million, bringing the last three months to 7.8 million new jobs after losses of 17.3 million in March and April. The private payroll service provider reported over 10 million fewer payroll jobs this year. Payrolls in July were notably flat in goods-producing sectors, including both manufacturing and construction, after two strong months. On the services side, professional and business services, which had lagged in hiring in the rebound, saw stronger gains. Overall, this report largely confirms that the economy flattened in July after sharp rebounds in May and June from the shutdowns for the novel coronavirus that decimated the economy in March and April. ADP National Employment ROSE by 167k in July, compared with the consensus estimate for a gain of 1,200k. Meanwhile, the revisions to the prior 3 months added an additional 2221k to the previous estimate. Over the past 12 months, private payrolls have decreased by an average of -901k per month, lifting employment to 8.4% BELOW its year-ago level. Jobs in Goods-Producing Industries ROSE by 1k jobs but Manufacturing gained 10k workers. Moreover, Construction lost 8k jobs. Meanwhile, Service-Producing Industries ROSE by 166k jobs with Professional/Business Services hiring 58k workers, Trade/Transport/Utilities adding 41k, and Financial Activities declining by -18k workers. Small Firms hired 63k workers, Medium-Sized Firms fell by 25k employees while Large Firms added 129k positions.
Article by Contingent Macro Advisors