ADP Employment Report - 163,000 Private Sector Jobs for July 2012

ADP, released their proprietary private payrolls jobs report. This month ADP is reporting a gain of 163,000 private sector jobs in July. June 2012 was revised down by 4,000 to 172,000 additional private payrolls. In contrast, the BLS reported 84,000 private sector jobs for June 2012. Graphed below are the reported private sector jobs from ADP. This report does not include government, or public jobs. ADP rarely mirrors the BLS report, which is released on Friday.

 

 

ADP's reported private job growth was 148,000 in the service sector. This is the 3rd month in a row most of the jobs have been in services. The goods sector only gained 15,000 jobs. Manufacturing, part of the goods sector, gain 6,000 jobs, but June was revised upward to 9,000 added manufacturing jobs. Construction added 5,000 jobs and the 2nd month in a row to gain jobs. ADP's financial services jobs increased by 9,000 jobs, making it a year for job gains in the private financial sector.

This report, if it matches Friday's official unemployment report, would overall imply overall weak job growth. Governments have just been shedding jobs, which are part of the BLS report. The U.S. needs about 100,000 jobs per month just to keep up with population growth.

ADP captures jobs by business size, which is one of the best features of this report, due to it's relativity using the same statistical methods and timeline. In July:

Employment on large payrolls —those with 500 or more workers— increased 23,000 and employment on medium payrolls —those with 50 to 499 workers— rose 67,000 in July. Employment on small payrolls —those with up to 49 workers— rose 73,000 that same period. Of the 67,000 jobs created on medium-sized payrolls, 4,000 jobs were created by the goods-producing sector and 63,000 jobs were created by the service-providing sector.

Below is the graph of ADP private sector job creation breakdown of large businesses (bright red), median business (blue) and small business (maroon). For large business jobs, the scale is on the right of the graph. Medium and Small businesses' scale is on the left.

 

ADP large, medium, small private sector jobs

 

Large business, who lobby Congress for their bad trade deals, more offshore outsourcing and more foreign guest worker importation and labor arbitrage, are almost absent from job creation in terms of hiring Americans. Notice how large businesses cliff dove in 2008, shedding employees, and have not returned at all to pre-recession employment levels. This pattern actually starts just about the time offshore outsourcing and the China PNTR came into effect, year 2000. 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.

There is a historic strong mismatch between ADP and the BLS jobs report on a month to month basis. 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 BLS jobs survey (CES) has a 100,000 payroll jobs overall margin of error.

The below graph shows shows how many private sector payroll jobs, each month, ADP was off by in comparison to what the BLS reported. This is a monthly graph, not cumulative. As we can see, it's rare where the two monthly reports get the exact same private payrolls growth numbers and June was off by 88,000 jobs, May was off by 26,000 where ADP reported 131,000 private sector payrolls and the BLS reported 105,000 private nonfarm payrolls. When the below graph number is negative, that means the BLS reported a larger number of jobs than ADP did, when the graph bar is positive, it means ADP reported larger private payrolls. Again, these are private sector jobs which is different from the BLS headline number. This graph was updated with the July BLS jobs report.

 

ADP vs. BLS

 

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 was stabilizing around 400,000, now increasing once again. This article was updated with the July BLS private non-farm payrolls data.

 

ADP vs. BLS

 

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. The graph below is the monthly change of private jobs as reported by ADP.

 

 

Regardless of the statistical differences between ADP and the BLS, July's report indicates weak to moderate job growth. Sorry folks, 100k range job growth numbers do not mean the Gods are now shining upon us. More we're all simply used to seeing beyond belief, pathetic job growth numbers. We still have estimated 28 million people needing a job. Four Hundred thousand monthly job growth, on the other hand, would be something to sing hallelujah over. Wouldn't it be nice if just one of these months, going on since December 2007, we weren't singin' de blues on the jobs statistics?

Here is last month's ADP private sector jobs report overview, only graphs revised.

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Struggling Americans see no change day after day

Anyone who looks for jobs fruitlessly in the US knows the situation is not improving at all, and hasn't been for years now (makes staying in a house and fed extremely difficult). There are only so many times you can see the same ads taken down and reposted by the same companies and same fraudsters/HR depts and fraudsters/temp firms. But don't dare question them about their lies or get tired of being led on. Make sure you treat them like the gods they think they are, lest LinkedIn and Forbes and FoxBusiness and politicians label you an ungrateful, lazy leech with a poor attitude - I guess Americans' ideal of questioning authority and being educated is only ideal when it suits corporate masters, or so I'm told nowadays.

How many people graduate college every year? 1.5+ million? So unless we're seeing 400,000, 500,000 + jobs created/month, 20 million unemployed Americans will soon grow to 30 million to 40 million. And those with jobs should be happy that they graduated to work for a federal agency (DOJ/US Attorneys - no shame, making attorneys with $150,000 in debt work for free?) or a private company for free for a year in an internship while their bosses pull in six figures and full benefits? Screw that. Or someone is "lucky" to now stock shelves at Home Depot after graduating with an aerospace engineering degree while the Home Depot founders go on Fox and belittle Americans for being lazy and uneducated?

Let me know when a new breed of politician comes to town, who only wants to serve the public, not get rich before, during, or after service (i.e., any current D & R at all levels of govt.) fights the oligarchs and actually delivers MASSIVE job growth of 500,000/month by ending bogus trade agreements, punishes outsourcing, punishes those hiring illegal workers, ends BS internships that pay nothing for people long after college and grad school, brings back Glass-Steagall, punishes CEOs and bankster criminals under FCPA and RICO (these were laid out before and are easy for any prosecutor with an IQ over 80) everywhere they lurk, and will do everything to bring back cooperation and integrity and the Golden Rule to American society. This "Survivor," snakeoil salesman, rape and pillage today to enrich yourself and your cronies attitude is only destroying America.

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why one shouldn't watch CNBC

They just claimed the ADP report was a "good sign". Good God, do they even understand the numbers? BTW: they claimed the stock market is up 50% in the last two years. Isn't that nice, while working America is in poverty de facto.

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CNBC is CNBS for a reason

I like CNBS for humor. Where else can you watch them run 1 minute ads extolling some millionaire or billionaire and make it seem like, "Hey, Jack Welch got rich off the backs off GE employees and now runs a private online MBA program ripping off people, so I should see him as a hero! Yippee!" CNBS and Bloomberg and everyone else need to reward their corporate sponsors/advertisers, so any news must be spun hard, lest people realize they have no $ to spend for corporate crap.
Stock market is a barometer of what, CNBS? Real inflation is much more than reported by Feds, and the Fed is keeping interest rates so low for retail customers that people have no choice but to help inflate stocks if they want to keep above inflation if they want to eat and buy gasoline. But the constant flashcrashes (e.g., today Knight Capital), NASDAQ screw ups, algo/HFT manipulations and mistakes are even scaring retail investors. And who can really trust brokerages anymore given MF Global and every other fraud we know about every day? CNBS knows the retail investor is done with the lies, especially after Farcebook was confirmed to be a farce. I can't wait until one or two of them is fired, has massive debt from too many vacation homes, and they can whine about how tough life is while being surrounded by people much smarter than them and with much more honesty on unemployment lines.

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Register People! Anonymous Drive-bys read this!

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ADP July jobs number of

ADP July jobs number of 163,00 and then today Aug 3, 2012 the Labor dept comes in with the exact same jobs number of 163,000.

How many times in the past has the ADP jobs number and the Labor Dept. number been exactly the same?

Looks a little strange to me in this election year. Maybe the Labor Dept liked the ADP number better than theirs.

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ADP != to BLS, BLS 172,000, not 163,000

BLS private sector jobs were 172,000. ADP is only private sector, doesn't report on government jobs.

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