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ADP Employment: Sharply Higher Over Last Two Months

July 1, 2020

Bottom Line: ADP reported a considerable revision to May payrolls. Adding nearly 6 million jobs in May and another 2.4 in June, ADP suggests that over 25% of the job losses in April (which stood close to 20 million), were offset by gains in May and June as reopenings from the shutdowns for the novel coronavirus saw businesses rehiring workers. Most of the losses and ensuing rehiring were in the leisure/hospitality and the trade/construction sectors. While the rehiring is impressive, the sums are still staggering. Over the last four months, 14 million people were eliminated from business payrolls. Finally, this report, especially the revisions to the May data, mostly confirms what we saw (and expect for tomorrow) from the government payroll report.

ADP National Employment ROSE by 2,369k in June, compared with the consensus estimate for a gain of 2,900k. Meanwhile, the revisions to the prior 3 months added an additional 6,350k to the previous estimate. Over the past 12 months, private payrolls have decreased by an average of -1, 087k per month, bringing employment to 10.2% BELOW its year-ago level.

Jobs in Goods-Producing Industries ROSE by 457k jobs as Manufacturing gained 88k workers.

Service-Producing Industries ROSE by 1,912k jobs with Professional/Business Services hiring 151k workers, Trade/Transport/Utilities adding 288k, and Financial Activities increasing by 65k workers.

Small Firms hired 937k workers, Medium-Sized Firms grew by 559k employees while Large Firms added 873k positions.

Article by Contingent Macro Advisors