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ADP Employment: Acceleration Into Year-End

January 3, 2019

Bottom Line: ADP said job growth was sharply stronger than expected in December, lifting the three-month average gain to 222k, above the 12-month average of 206k, suggesting a modest acceleration in the pace of hiring in late '18. ADP data do not account for government workers which are included in the Employment Situation headline number. This report would suggest modest upside risk to the 180k consensus for tomorrow's report.

ADP National Employment ROSE by 271k in December, compared with the consensus estimate for a gain of 180k. Meanwhile, the revisions to the prior 3 months subtracted 8k from the previous estimates. Over the past 12 months, private payrolls have increased by an average of 206k per month, lifting employment to 2.0% ABOVE its year ago level.

Jobs in Goods-Producing Industries ROSE by 47k jobs but Manufacturing gained 12k workers. Moreover, Construction gained 37k jobs.

Meanwhile, Service-Producing Industries ROSE by 224k jobs with Professional/Business Services hiring 66k workers, Trade/Transport/Utilities adding 33k, and Financial Activities increasing by 7k workers.

Small Firms hired 89k workers, Medium-Sized Firms grew by 129k employees while Large Firms added 54k positions.

Article by Contingent Macro Advisors