Despite Mark Zandi's promises that all is well in the US economy, ADP had dropped (and missed) two months in a row [4] prior to today's print but a very small rise and beat this month (213k vs 205k expected and 205k previous) shows some stability. Of note is that this print is no better than the average ADP job change over the last four years. On the bright side small businesses add the most jobs while medium-sized businesses added the least. Of potential note to this somewhat 'meh' jobs data, yesterday's Consumer Confidence data showed a disappointing plunge in Jobs-Plentiful vs Jobs-Not-Plentiful which suggests Friday's all-important payrolls print may not be as exuberant as expected.
Some other details: goods-producing employment rose by 58,000 jobs in September, up from 42,000 jobs gained in August. The construction industry added 20,000 jobs over the month, below last month’s gain of 23,000. Meanwhile, manufacturing added 35,000 jobs in September, the highest total in that sector since May 2010.
Service-providing employment rose by 155,000 jobs in September, down from 160,000 in August. The ADP National Employment Report indicates that professional/business services contributed 29,000 jobs in August, down from 37,000 in August. Expansion in trade/transportation/utilities grew by 38,000, up from August’s 30,000. The 5,000 new jobs added in financial activities was down slightly from last month’s number.
And while nobody actually takes the ADP report seriously, far many reasons but also because it is a seasonally-adjusted black box, in which nobody but ADP knows what the actual unadjusted data is, here is what the report said:
"September’s jobs added number marks the sixth straight month of employment gains above 200,000,” said Carlos Rodriguez, president and chief executive officer of ADP. “It’s a positive sign for the economy to see the 200,000-plus trend continue.”
Mark Zandi, chief economist of Moody’s Analytics, said, "Job gains remain strong and steady. The pace of job growth has been remarkably similar for the past several years. Especially encouraging most recently is the increasingly broad base nature of those gains. Nearly all industries and companies of all sizes are adding consistently to payrolls.”
And Zandi's #timestamp ahead of this Friday's NFP report, when asked on CNBC why he did not revise his August data lower: "BLS is wrong." Hello pot, meet the black kettle. Also, let's wait and see just how "wrong" the BLS is...
Small rise and beat shows escape velocity still a long way off.
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An alternative perspective.:
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The breakdown:
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The ADP headline:
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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