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ADP Employment: Modest Deceleration in Job Gains

July 5, 2018

Bottom Line: After missing expectations in May ADP reported another month of modestly slower than expected job gains in June, suggesting a modest deceleration in the trend pace of job growth even considering some upward revisions to prior data. Trade, transport and utilities jobs rebounded from losses last month, but the IT sector saw modest losses. Consensus for Friday's non-farm payroll report is 195k for June, down from 223k in May -- this ADP data is still consistent with that consensus given ADP does not include government workers.

ADP National Employment ROSE by 177k in June, compared with the consensus estimate for a gain of 190k. Meanwhile, the revisions to the prior 3 months added an additional 18k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 190k per month, lifting employment to 1.8% ABOVE its year ago level.

Jobs in Goods-Producing Industries ROSE by 30k jobs as Manufacturing gained 12k workers. Moreover, Construction gained 13k jobs.

Meanwhile, Service-Producing Industries ROSE by 148k jobs with Professional/Business Services hiring 33k workers, Trade/Transport/Utilities adding 24k, and Financial Activities increasing by 7k workers.

Small Firms hired 29k workers, Medium-Sized Firms grew by 80k employees while Large Firms added 69k positions.

Article by Contingent Macro Advisors