ADP Employment: Sharp Declines
June 5, 2019
Bottom Line: ADP said job growth was just 27k in May. The volatile construction sector fell 43k in May after adding 48k jobs in April. Service producing industries saw growth of just 71k jobs, sharply below the six- and 12-month average of 169k. Overall, while there has been one-off volatility in the past that reversed the following month and/or wasn't always followed by a commensurate surprised on the national payroll data, there was little positive to say about this report. ADP data do not account for government workers which are included in the Employment Situation headline number, and this would certainly suggest the risk is for a substantial downside miss to the consensus of 180k for Friday's nonfarm payroll release. ADP National Employment ROSE by 27k in May, compared with the consensus estimate for a gain of 185k. Meanwhile, the revisions to the prior 3 months added an additional 2k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 202k per month, lifting employment to 1.9% ABOVE its year ago level. Jobs in Goods-Producing Industries FELL by 43k jobs but Manufacturing lost 3k workers. Moreover, Construction lost 37k jobs. Meanwhile, Service-Producing Industries ROSE by 71k jobs with Professional/Business Services hiring 22k workers, Trade/Transport/Utilities flat and Financial Activities increasing by 13k workers. Small Firms fired or lost a net 52k workers, Medium-Sized Firms grew by 11k employees while Large Firms added 68k positions.
Article by Contingent Macro Advisors