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ADP Private Payrolls Miss, Add Only 204K Private Jobs, Lowest Since March

Tyler Durden's picture




 

In what will hardly be a good sign for tomorrow's "critical" non-farm payrolls report, moments ago ADP reported that in August only 204K private payrolls were created in the US economy, below the downward revised 212K in July, and below the consensus estimate of 220K. The good news, as Carlos Rodriguez, president and chief executive officer of ADP said, is that "August marks the fifth straight month of employment gains above 200,000, continuing an encouraging trend for the U.S. labor market.” Just barely. The bad news: this was the lowest ADP print since March, and hardly the "lift off"  trend that many were expecting. Notably, the June 281K jobs print was revised even higher to 297K the highest in years and makes one wonder how much forward demand was pulled back into Q2 as a result of abnormally easy credit conditions and generous government spending.

Some of the key details:

Change in Nonfarm Private Employment (in thousands)

 

The breakdown:

Payrolls for businesses with 49 or fewer employees increased by 78,000 jobs in August. That’s down from 89,000 in July. Job growth was also down over the month for medium-sized firms. Employment among medium-sized companies with 50-499 employees rose by 75,000, down from 88,000 in July. Employment at large companies – those with 500 or more employees – increased by 52,000, up from 35,000 the previous month. Companies with 500-999 employees added 5,000, down from July’s 13,000.

From the report:

Goods-producing employment rose by 41,000 jobs in August, up from 23,000 jobs gained in July. The construction industry added 15,000 jobs over the month, slightly above last month’s gain. Meanwhile, manufacturing added 23,000 jobs in August, the highest total in that sector since December 2012.

 

Service-providing employment rose by 164,000 jobs in August, down from 190,000 in July. The ADP National Employment Report indicates that professional/ business services contributed 51,000 jobs in August, down from 60,000 in July. Expansion in trade/transportation/utilities grew by 28,000, down from July’s 43,000. The 5,000 new jobs added in financial activities was down almost half from last month’s number.

 

Mark Zandi, chief economist of Moody’s Analytics, said, "Steady as she goes in the job market. Businesses continue to hire at a solid pace. Job gains are broad based across industries and company sizes. At the current pace of job growth the economy will return to full employment by the end of 2016.”

And at the end of 2016, assuming the current contraction of the labor force, unemployment will also be negative.

Some other charts:

Historical Trend - Change in Total Nonfarm Private Employment

Total Nonfarm Private Employment by Company Size

 

Change in Total Nonfarm Private Employment by Selected Industry

 

Finally, while ADP has zero predictive capacity to the actual NFP number, and is thus worthless, its greatest value added comes in creating infographics. Like this one.

 

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Thu, 09/04/2014 - 08:31 | 5179179 Kristian
Kristian's picture

If decisions by the Fed depend on the latest jobs report. It is clear that they don't have a vision at all.

Thu, 09/04/2014 - 08:47 | 5179220 GetZeeGold
GetZeeGold's picture

 

 

Looking for the breakdown of 40 hr/wk versus 29.5 hr/wk jobs.....doesn't seem to be all that clear.

 

Might have to fall back on the labor participation rate for a clearer analysis.

Thu, 09/04/2014 - 08:32 | 5179184 SoilMyselfRotten
SoilMyselfRotten's picture

Soooo, why is the USD up almost .50? And why isnt gold down $20 to go with it?

 

Thu, 09/04/2014 - 08:38 | 5179212 Xibalba
Xibalba's picture

why isn't SP500 down 20 to go with it?

Thu, 09/04/2014 - 08:43 | 5179233 Clockwork Orange
Clockwork Orange's picture

Its Draghi's day to peddle fraudulent data and orchestrate criminal policy.  USSA is off the table today.  Tomorrow is our headline day for rally perpetuation.

Thu, 09/04/2014 - 08:46 | 5179242 Bossman1967
Bossman1967's picture

MANIPULTION in one word

Thu, 09/04/2014 - 08:34 | 5179191 onewayticket2
onewayticket2's picture

they need to build up supply to load back into Sept numbers....pre election!

Thu, 09/04/2014 - 08:48 | 5179258 GetZeeGold
GetZeeGold's picture

 

 

Oh yeah....that's coming right up. Where has the time gone?

Thu, 09/04/2014 - 08:54 | 5179284 gcjohns1971
gcjohns1971's picture

Can we legalize hookers and blow during work hours for federal bureaucrats?

A whole lot of recovery could happen while they are...otherwise engaged.

Thu, 09/04/2014 - 08:35 | 5179195 Smegley Wanxalot
Smegley Wanxalot's picture

With the price of potatos going up, it's not justifiable to hire more fry cooks to feed the masses who can no longer afford potato chips, the major primary staple in the diet of most americans, followed by Snickers and Equal.

Thu, 09/04/2014 - 08:36 | 5179202 Xibalba
Xibalba's picture

Pictures are needed for the athletes 

Thu, 09/04/2014 - 08:39 | 5179219 gcjohns1971
gcjohns1971's picture

Reposted from the ECB Negative Interest Rate story...

The St Louis Fed blames the recession on the Common Man's "Money Hoarding".

http://www.cnbc.com/id/101963821

45 years of flat icomes?  No. That has nothing to do with it.

Marginal total tax rates over 50%?  No. That has nothing to do with it.

Too much debt to qualify for more loans?  Nope.

Start-up killing levels of regulation, preventing job market entrants from getting jobs, starting families, establishing new households?  Nope.

Fed equity market generosity outbidding start-ups for loans?  Nope.

Nope. Average people are just hoarding money.  They are just stuffing it in mattresses, hiding it in walls, paying off their debts.

Why, by measure of the demand gap alone every single American must have $30K-$50K hidden around their houses.

OR...

The Fed could be manned by retards.

Thu, 09/04/2014 - 08:49 | 5179256 gcjohns1971
gcjohns1971's picture

Let's see...

Decelerating growth...Check.

Below-target inflation (Which over months will trigger outright deflation if unaddressed)... Check

Geopolitical pressures leading to domestic governmental pressures...  Check

 

Forecast:

QE is coming back.

Uncertain Timing:

- Will it come before election to reinforce encumbants?

- Will it come after election to buy-off electees?

- Will it arrive before Christmas?  (Because if it doesn't arrive by St Paddy's Day you'll get a Bear Stearns-like surprise.).

- How will it be hidden/justified?  Re-expansion of deficits to fund military R & D?  Will it be hidden by primary dealers directly buying the resultant Tbills, and the Fed reimbursing them under the table?

Thu, 09/04/2014 - 08:40 | 5179223 Dr. Engali
Dr. Engali's picture

Just what we needed. 164,000 new part time bus boys, telemarketers, and cab drivers. Forward bitchez!

Thu, 09/04/2014 - 08:45 | 5179238 Apply Force
Apply Force's picture

Some of these stats might not be as far off as we'd like to imagine.  I can name several local businesses here in the Midwest that had spring/summer hires as a last gasp effort, and will be going out of business forever this fall/winter.

It's like an engine stalling - there are stops and stutters, some odd revving, and an occasional surprising backfire, but all-in-all the engine is failing.  Saying goodbye to this economic era will be more chaotic than most Sheeple think.

Thu, 09/04/2014 - 08:50 | 5179267 Winston Churchill
Winston Churchill's picture

Same with the builders here in South Florida.

Lots of new starts and no demand that I can see.

Build it and go bankrupt,vs. don't build it and go bankrupt.

Or maybe get a negative interest rate mortgage in euros.

Thu, 09/04/2014 - 10:33 | 5179703 ejmoosa
ejmoosa's picture

At least you are pulling in some dollars while you build, right?

Thu, 09/04/2014 - 08:48 | 5179251 AdvancingTime
AdvancingTime's picture

The implications of poor job creation are massive. The biggest may be that a huge number of people are dropping from the work force. Often these people have little in the way of savings, this means that the burden of caring for them will be transferred to society. If to many people shift into this category we will slowly wear down through attrition.

Finding a fair way to share and balance the work load that goes on every day may be one of the most important problems facing our modern world. Not discovering a solution to this dilemma bodes poorly for our consumer driven economy and adds to the toxic problem of inequality. More on the implications of unemployment in the article below.

http://brucewilds.blogspot.com/2013/09/implications-of-poor-job-creation...

Thu, 09/04/2014 - 09:14 | 5179376 Apply Force
Apply Force's picture

So, by stating "Finding a fair way to share and balance the work load that goes on every day may be one of the most important problems facing our modern world" you really just mean grow food or die, right?  'Cause that is where we are headed.  Less from the State/"Economy" and more from yourself.

It is straight up foolish not to have your own way (sans the State) to stay hydrated, stay fed, stay warm and stay dry.  In the US we have plenty of standing structures - so dry and kinda warm should pose little problem overall.  Most, however, are sorely lacking on the hydration & food front.  Balancing the workload should begin by helping your family and neighbors understand food and water - else they'll be after yours.

Thu, 09/04/2014 - 08:50 | 5179265 Kina
Kina's picture

AND the problem with the job creation that they have is that it is part time jobs, mostly by older people trying to stay alive....i.e. there will be no economic recovery from their jobs.

Thu, 09/04/2014 - 08:58 | 5179306 StupidEarthlings
StupidEarthlings's picture

Meh..prolly just the weather. People just arent lookin for jobs because of it.

 

Thu, 09/04/2014 - 10:27 | 5179670 ejmoosa
ejmoosa's picture

Corporate profit growth after taxes as reported by the BEA plunged over the last six months, and for the last twelve months is down by 3.23%

Do you really expect businesses across the nation to expand hiring as they have fewer dollars reaching the bottom line?

This is not rocket science.

What do you think your local pizza joint does when they are making less money?  Hire or fire?

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