ADP Employment: Small- And Mid-Sized Firms Rebounded

Bottom Line: ADP reported 749k new jobs created in September, more than expected, as hiring at small- and medium-sized firms rebounded. After losses of nearly 20 million in March and April and subsequent gains of 7.8 million in May and June, ADP has reported an average monthly gain of 482k jobs in the three months since then. While historically large, the three-month gain is modest relative to the scale of the losses and reveals a large output gap in the economy remains with many parts of the country still far from fully reopened. Overall, the pace of the recovery remains modest after the initial four-months of massive volatility. That said, this report hints that there may have been a modest re-acceleration in September. ADP National Employment ROSE by 749k in September, compared with the consensus estimate for a gain of 649k. Meanwhile, the revisions to the prior 3 months added an additional 56k to the previous estimate. Over the past 12 months, private payrolls have decreased by an average of -807k per month, leaving employment 7.5% BELOW its year-ago level. Jobs in Goods-Producing Industries ROSE by 196k jobs but Manufacturing gained 130k workers. Moreover, Construction gained 60k jobs. Service-Producing Industries ROSE by 552k jobs with Professional/Business Services hiring 78k workers, Trade/Transport/Utilities adding 186k, and Financial Activities increasing by 29k workers. Small Firms hired 192k workers, Medium-Sized Firms grew by 260k employees while Large Firms added 297k positions.