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ADP Employment: Modest Gains to Start 2021
February 3, 2021
Bottom Line: ADP reported modestly stronger than expected employment in January and revised December's loss to show less significant losses. Small and Large businesses alike added employees with hiring focused in the services sectors after losses late in 2020. Overall, this was a positive sign ahead of Friday's payroll report, leaving the potential for upside versus expectations of +70k. Still, the labor market recovery remained tentative to start 2021, which in turn leaves concern for consumption growth in the 1st Quarter as the country attempts to accelerate vaccine distribution.ADP National Employment ROSE by 174k in January, compared with the consensus estimate for a gain of 70k. Meanwhile, the revisions to the prior 3 months added an additional 40k to the previous estimate. Over the past 12 months, private payrolls have decreased by an average of -790k per month, lifting employment to 7.3% BELOW its year-ago level.Jobs in Goods-Producing Industries ROSE by 19k jobs but Manufacturing gained 1k workers. Moreover, Construction gained 18k jobs. Meanwhile, Service-Producing Industries ROSE by 156k jobs with Professional/Business Serviceshiring 40k workers, Trade/Transport/Utilities adding 16k, and Financial Activities increasing by 1k workers.Small Firms hired 51k workers, Medium-Sized Firms grew by 84k employees while Large Firms added 39k positions.
Article by Contingent Macro Advisors