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ADP Employment: Negative Revisions

October 2, 2019

Bottom Line: Private sector employment rose moderately in September. Gains were less than expected, though, and there were sharp negative revisions to the initially strong August tally. After some volatility, the three-month average is just above the six-month average but slightly below the 12-month average, suggesting stability after a slight deceleration in job growth on a trend basis. Service industry hiring is trending modestly higher again, while hiring in goods producing industries remains in a steady downtrend. ADP data do not account for government workers which are included in the Employment Situation headline number. This report would suggest is mostly consistent with the 147k consensus for Friday.

ADP National Employment ROSE by 135k in September, compared with the consensus estimate for a gain of 140k. Meanwhile, the revisions to the prior 3 months subtracted 38k from the previous estimates. Over the past 12 months, private payrolls have increased by an average of 176k per month, lifting employment to 1.7% ABOVE its year ago level.

Jobs in Goods-Producing Industries ROSE by 8k jobs as Manufacturing gained 2k workers. Moreover, Construction gained 9k jobs.

Service-Producing Industries ROSE by 127k jobs with Professional/Business Services hiring 20k workers, Trade/Transport/Utilities adding 28k, and Financial Activities increasing by 8k workers.

Small Firms hired 29k workers, Medium-Sized Firms grew by 39k employees while Large Firms added 67k positions.

Article by Contingent Macro Advisors