Wednesday, 30 April 2008

ADP Report Indicates Slight Rise in April Payrolls

Actually last months ADP report also suggested slight growth in payrolls, however non-farm payrolls reported by the BLS were down 80k. From

Nonfarm private employment increased 10,000 from March to April 2008 on a seasonally adjusted basis, according to the ADP National Employment Report™. The estimated change in employment from February to March was revised down from an increase of 8,000 to an increase of 3,000.

Though April’s estimate for a small increase in employment is above consensus forecasts of an outright decline, it nevertheless suggests that a sharp deceleration of employment continues.

Employment in the service-providing sector of the economy grew 64,000, while employment in the goods-producing sector declined 54,000, the seventeenth consecutive monthly decline. Manufacturing employment fell 26,000 in April and marked the twentieth consecutive monthly decline.

Large businesses, defined as those with 500 or more workers, saw employment decline 18,000, while medium-size companies with between 50 and 499 workers declined by 14,000. Conversely, employment among small-size businesses, defined as those with fewer than 50 workers, advanced 42,000 during the month.

Two sectors of the economy hit hardest by recent problems in mortgage markets have been residential construction and financial activities related to home sales and mortgage lending. In April, construction employment fell another 28,000. This is the seventeenth consecutive monthly decline, bringing the total decline in construction jobs since the peak in August 2006 to 288,000. Employment in the financial activities sector advanced just 2,000 for the month.

So, can we really put much stock in the ADP report as a predictor for Friday's non-farm payroll report from the BLS? Probably not, but we can probably also say that Friday's report won't be terrible (ie. more than -150k).