Wednesday, 2 April 2008

ADP Report Suggests Small Growth In March NFP's

As mentioned previously, the ADP employment report has been mixed at best when it comes to predicting growth in non-farm payrolls. from

Nonfarm private employment increased 8,000 from February to March 2008 on a seasonally adjusted basis, according to the ADP National Employment Report™. The estimated change in employment from January to February was revised up 5,000 to negative 18,000. Though positive, the slight increase of 8,000 in March signals a continuing sharp deceleration of employment growth from previous levels.

Unlike the weakness of employment reported in February, which was widespread across businesses of all sizes and apparent in all major sectors of the economy, the weakness of employment in March was concentrated among larger businesses in the goods-producing sector.

Employment in the service-providing sector of the economy grew 85,000, while employment in the goods-producing sector declined 77,000, the sixteenth consecutive monthly decline. Manufacturing employment fell 58,000 in March and marked the nineteenth consecutive monthly decline.

Large businesses, defined as those with 500 or more workers, saw employment decline 52,000. Conversely, employment among small-size businesses, defined as those with fewer than 50 workers, advanced 55,000 during the month, up from a revised 16,000 in
February. Employment increased just 5,000 among medium-size businesses with between 50 and 499 workers.

The positive here is that small businesses, at least according to this report, are still hiring. Adding in the job growth from the government sector, today's ADP employment report points to a rise in non-farm payrolls of about 30k in March.

The table above compares the BLS NFP numbers with the ADP report for the previous 3 months. As you can see they are all over the place. So get your dartboards out on Friday for the BLS non-farm payroll report and as always watch the revisions to prior months.