ADP, released their proprietary private payrolls jobs report. This month ADP is reporting a gain of 110,000 private sector jobs in October. September 2011 was revised up from 91,000 to 116,000. In September, the BLS reported 137,000 private sector jobs, or 82,000 if one removes returning striking Verizon workers. Below are the reported private sector jobs from ADP. This report does not include government, or public jobs.
ADP's numbers claim the service sector created 114,000 jobs while the goods sector lost -4,000 jobs. The manufacturing contraction tab is -8,000 jobs for the month. ADP's financial services jobs increased 1,000 jobs, or no growth. This report, if it matches Friday's official unemployment report, is weak job growth and not enough to make a real dent in getting people back to work.
Construction dropped yet another -1,000 jobs and the ADP notes 2,131,000 construction jobs are reported gone since the 1st of January 2007. Their tally for financial services jobs lost since the same date are 686,000. One question which banks refuse to answer: Were these jobs offshore outsourced?
ADP captures jobs by business size and this is worth looking at, especially due to it's relativity within the same report (and methods). In October:
Employment on small payrolls, those with up to 49 workers, rose 58,000 in October, down from the 64,000 jobs created among small businesses last month. Employment on medium payrolls, those with 50 to 499 workers, rose 53,000, and employment on large payrolls, those with 500 or more workers, declined 1,000.
Below is the graph of ADP private sector job creation breakdown of large businesses (bright red), median business (blue) and small business (dark red). For large business jobs, the scale is on the right of the graph. Medium and Small businesses scale is on the left.
This is the same result, month after month. Large business, who lobby Congress for their bad trade deals, more offshore outsourcing through foreign guest worker importation and labor arbitrage, yet these same businesses are non-existent for hiring Americans. Notice how large businesses have been declining and the pattern starts just about the time offshore outsourcing and the China PNTR came into effect. Small businesses, on the other hand, have increased employment. May I suggest that small businesses are not international, they are not signing offshore outsourcing contracts and moving jobs to India and China. Multinationals, on the other hand, the below decade trend line clearly shows these so called U.S. corporations have abandoned the U.S. worker, on whole. Earlier, the BEA reported statistics validating the ADP job creation trends by business size.
There is a strong mismatch between ADP and the BLS jobs report. To date, the number of private nonfarm payroll jobs ADP reports versus what the BLS reports and on a month-to-month and even cumulative basis do not match. This monthly error is often large, especially when looking at small job growth overall (< 400,000 jobs per month) on a month to month basis. The monthly reported BLS jobs is often within their survey 100,000 payrolls margin of error.
Below is the cumulative difference between what the ADP reports as the private nonfarm payroll jobs vs. the BLS (ADP minus BLS). This line shows the divergence, over time in number of nonfarm private payroll jobs reported between the two reports. The difference seems to be stabilizing around 400,000. This article will be updated with the October BLS payrolls data.
While ADP notes a simple correlation of 0.95, well, a 5% error between monthly reported jobs numbers is an average, and we can see on some months the differences are quite large and around 2008, the difference started to hit about 900,000 jobs. That said, the reported job growth is so piss pour, statistically we're rolling around in the margin of error each month.
ADP does use the same seasonal adjustment as the BLS, but their other methodology and even sampling size are different, proprietary. That said, ADP has now put up some details of their methodology to explain the statistical differences between their estimate, the actual mathematics, vs. the BLS. This is new, and good ADP is disclosing their entire methodology so we may get more apples to apples comparisons of the two reports.
Here is the September 2011 ADP private sector jobs report overview, unrevised.