ADP Misses Big, Prints Lowest Increase Since September; Manufacturing Jobs Post Shocking Decline

Tyler Durden's picture

Update: Goldman commentary which mirrors ours:

  1. The ADP estimate of private employment growth was +119k for April, below the consensus expectation for a 170k gain (growth in February and March was also revised down slightly). As with the official BLS count of employment, we believe that a “payback” from warm weather earlier in the year could explain some of the slowing in the ADP measure in both March and April.
  2. Results from the ADP report were mixed across industries. Employment at goods producing firms declined by 4k, with declines of 5k in both manufacturing and construction employment. The decline in manufacturing employment looks at odds with other information on the sector, such as yesterday’s ISM report. The drop in construction employment may be partly weather-related. Service sector employment rose by +123k, down from +158k in March and +184k in February.


Those hoping Goldman's NFP forecast of 125,000, well below consensus, is wrong, may have to reassess their thesis following the just released ADP number which came as a big disappointment to consensus of 170,000, instead printing at only +119,000, to 110,590. (The previous improvement was also downward revised from +209K to +201K). This was the lowest sequential change since September 2011, and confirms once again, the declining trends last seen in... 2011. It was also the biggest miss in 11 months. Luckily, as the scatterplot below shows, ADP is completely meaningless when predicting NFP so our gut reaction would be to expect a beat in NFP based on this print considering the whole Schrodinger economy and what not (see China). However, on an apples to apples basis, one thing is certain: record warm winter payback is a bitch. And finally, that whole Obama export renaissance is not doing all too hot: goods producing sector: -4,000 in April, while manufacturing jobs declined by -5,000. But, but, the soaring ISM..... oh forget it.

From the press release, where we find Hopium is back. How shocking that even ADP has been exposed to have a subjective, upward bias.

“According to data shown in the ADP National Employment Report, monthly employment gains averaged just over 200,000 during the first quarter of this year,” said Carlos Rodriguez, President and CEO of ADP. “This month’s modest increase of 119,000 jobs appears consistent with the first-quarter Gross Domestic Product growth of 2.2 percent.


We hope future rates of job creation will be more aggressive and sustained,” Rodriguez added.


According to Joel Prakken, Chairman of Macroeconomic Advisers, LLC, “While April’s increase was the twenty-seventh consecutive monthly advance, it nonetheless reflected a deceleration in the recent pace of hiring. This deceleration seems consistent with other incoming data, including a disappointingly weak report on first-quarter Gross Domestic Product, a recent back-up in initial unemployment claims, and last month’s relatively weak reading on establishment employment reported by the Bureau of Labor Statistics.”


Prakken added: “There is some evidence that unusually warm weather boosted employment during the winter months, with a “payback” now coming due. The modest rise in private employment suggests that the national unemployment rate probably did not decline in April unless there was a notable decline in the labor force.”

From the report:

Employment in the U.S. nonfarm private business sector increased by 119,000 from March to April on a seasonally adjusted basis. The estimated gain from February to March was revised down modestly, from the initial estimate of 209,000 to a revised estimate of 201,000.


Employment in the private, service-providing sector increased 123,000 in April, after rising 158,000 in March. Employment in the private, goods-producing sector declined 4,000 jobs in April. Manufacturing employment dropped 5,000 jobs, the first loss since September of last year.


Employment on large payrolls—those with 500 or more workers—increased 4,000 and employment on medium payrolls—those with 50 to 499 workers—rose 57,000 in April.


Employment on small payrolls—those with up to 49 workers—rose 58,000 that same period. Of the 57,000 jobs created by medium- sized businesses, 8,000 jobs were created by the goods-producing sector and 49,000 jobs were created by the service-providing sector.


Construction employment also fell by 5,000, the first decline in seven months and following healthy gains during the unusually warm winter months. Employment in the financial services sector increased 13,000 in April, marking nine consecutive monthly gains there.


Biggest miss since May 2011:

Finally, courtesy of John Lohman, here is why this number is completely meaningless when predicting NFP:

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
insanelysane's picture

Unemployment rate drops to 7.9%, book it.

GetZeeGold's picture



Naw.......5.1% tops.


King_of_simpletons's picture

Do not worry folks. Come election time by sheer magic everyone will have jobs !!

mf7lakes's picture

If everyone would just drop out of the labor pool, we wouldn't be counted in the NFP - Right?  Therefore, we would have 0% unemployment .... what a concept!!!

VisualCSharp's picture

Technically, we'd have a divide by zero condition. Total number of workers / Total number of potential workers (0 / 0)

Boilermaker's picture

WRONG!  It will be 7.9999%

Silveramada's picture

ADP data look good: for a depression stage economy...

ihedgemyhedges's picture

Service job growth very nice.  Hookers maybe?

GetZeeGold's picture



Good job for someone looking for a tax shelter.


sabra1's picture

i guess hooking rugs is a job!


ihedgemyhedges's picture

No rugs, they're all shaved now......................

lolmao500's picture

Don't worry, Krugman, Greenspan and Bernanke to the rescue with QE3 on steroids!

lizzy36's picture

I personally think that Yanks should be targetting 4% inflation.

Finally, after hoarding guns for 10 years, Yanks could use them. It would be Darwinian.

GetZeeGold's picture



We'd prefer you call us Damn Yankees.




A yankee is a northener who comes down to Texas and Visits

A Damn yankee is a northener who comes down and stays


MachoMan's picture

I never understood why foreigners called all americans yanks...  if you went into new york and called everyone a yankee, I think it would get a bit of a different reaction than doing so in a southern dive bar...  hell, even a southern church during service...  good luck getting out alive.

brewing's picture

haven't seen the deer in the headlights picture for awhile...

Shizzmoney's picture

+4000 in one month for the bigger companies

49,000 jobs were created by the service-providing sector.

Nice job Obama; you'll be known as "When I was a waitor during the Obama Administration" President.

Mitt could be worse; we could be all butlers. 

lol Cue the fail horn

azzhatter's picture

But a butler only has to put up with one family of assholes, a waiter has to deal with many

lizzy36's picture

But i thought Obama was on track to double exports in 5 years. How could yanks possibly lose 5000 manufacturing jobs? Obama wouldn't lie would he?

Obama narrative: "we spent $15 trillion on the recovery and we saved at least 1 million jobs". 

francis_sawyer's picture

On the front of 'exporting' inflation, jobs, & debt... He's exceeding even his own wildest boasts...

GetZeeGold's picture



Wisely they dropped the word created.......from created or saved.


MachoMan's picture

It's not global warming it's err...  climate change!  YEAH!  climate change!  Let's go with that one.

agNau's picture

Agreed, the digital dollar export is booming. We should Soon hear....."Our exports have risen into the trillions due to my sound dollar policy."
That shrill whining noise heard, the next "Debt Bomb" falling.
Exponential growth of debt the only solution.

LongSoupLine's picture

que QE3 rumors fo the algo feeding frenzy on 0% volume.  rinse-n-repeat.

DeadFred's picture

Hopefully so. I'm still looking for that cushy point to buy my positions for the roller coaster ride down and I'm worried that was yesterday. First grandchild was born yesterday so top-calling took a lower priority.

ElvisDog's picture

QE3 with gasoline above $4 a gallon in the U.S. Yeah, that's the ticket. Even an economic illiterate like Obama would understand what that would do to his re-election chances. Very simply, if gas is over $5 a gallon in November he loses. Doesn't matter what else is going on.

HD's picture

"Clouseau was also always on the case"

Great fucking comeback Rick.

*forgive the language ladies*

fonzannoon's picture

Forgive me but can someone please briefly tell me what this whole Shrodingers cat reference is about? Is it just the idea that you can baffle people with contradictory info? They needed a cat to tell us that?

HD's picture

Both dead and alive at the same time. It was a famous thought experiment.


francis_sawyer's picture

Shrodinger had this cat you see...

ElvisDog's picture

Schrodinger, his cat, and a jew walk into a bar.....

DeadFred's picture

The SPCA will be angry with you if you actually conduct the experiment though.

Snakeeyes's picture

Throw on top of that the big miss in mortgage refinancings in the US after the massive intervention in housing with the 14 loan modification programs.

TwoJacks's picture

hoping for future rates of growth - love that strategy, hope.

Stoploss's picture

Shocking, and unexpected.

GetZeeGold's picture



I know....after all....we did kill Osama.


Maybe if we just spiked the ball a little harder.


DownByTheRiver's picture

hey, remember how we 'killed osama' and then seal team 6 got blowed up a few days later?


that was weird, right?

earleflorida's picture

shit, we knew the whereabouts of bin laden 5 years ago. it was no big secret to the fbi, cia, bush#43 or obama, period!

pakistan's military [general-n-charge?] leaders, and isi run the entire  country with the same bullshit that the cia has with the fbi, neither trust the other, so they defeat the entire system for their own personal [power & money] goals, although the u.s. president has been derelick-in-his-duties for decades,... being controlled by some kind of '3rd eminence`grise'? the people of pakistan hate the military dictatorships that have been running [ruining financially & morally] the country for decades, all the while the isi controls everything. 

pakistan literally controls afghanistan's future, and has since the ussr war. the u.s. knows this, and obama's message to the afghan's yesterday was, your on your own -- but, if you'd like to turn-the-table's on your cut-throat neighbor and fuck-up pakistan, be our guest.

quickly,... the u.s. can't stand pakistan, period! the indian's can't stand pakistan, along with the russian's that support india. the chinese are becoming less tolerant of pakistan, especially when their fucking-up the regions political landscape. bottom line -  india, russia, china, japan, korea, mongolia, and yes even afghanistan don't need no 'hillbilkia', backwater terrorist nation,  fucking-up asia.


TwoJacks's picture

what happened to that guy swinging the baseball bat in his garage?  that was fun to watch at times like this

Its_the_economy_stupid's picture

Really wish I saved that link!

GetZeeGold's picture



Why isn't this guy running for President again? Half an hour on the House floor with a baseball bat and our problems would be over.


Cruel Aid's picture

I forgot about this magnificent redneck, feeling our pain.


lolmao500's picture

All hail all the new McDonalds employees!