Following June's small-business-driven better-than-expected rise in ADP employment, July printed a stunningly weak 185k against expectations of 215k - the biggest miss since March. This is around the lowest level of the year and lowest since Q1 2014. It is also 20% lower than the 232K ADP print a year ago, and the weakest July print since 2013: all signs screaming QE4 a rate hike is imminent.
Sure enough small business exuberance in June turned to pessimism in July as gains rose at half the pace for firms less than 50 people. Manufacturing jobs were also weak (8k goods producing vs 178k services). The question now is what will The Fed need as an excuse to raise rates given that employment is no longer their crutch, printing below economists' lowest estimate.
From the report:
Payrolls for businesses with 49 or fewer employees increased by 59,000 jobs in July, half of the June number. Employment among companies with 50-499 employees increased by 62,000 jobs, down from 78,000 the previous month. Employment gains at large companies – those with 500 or more employees – increased sharply from June, adding 64,000 jobs in July, up from 34,000. Companies with 500-999 added 17,000 jobs after adding 28,000 jobs in June. Companies with over 1,000 employees added 47,000 jobs, almost eight times the weak 6,000 added the previous month.
Some commentary from the source which still refuses to provide unadjusted data:
"July employment growth was slower than June, but is still in line with what we have seen since the first of the year,” said Carlos Rodriguez, president and chief executive officer of ADP. “Notably, large businesses with more than 500 employees had their strongest job gains since last December and were almost double the June number.”
Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth is strong, but it has moderated since the beginning of the year. Layoffs in the energy industry and weaker job gains in manufacturing are behind the slowdown. Nonetheless, even at this slower pace of growth, the labor market is fast approaching full employment.”
Because crashing oil prices are "unambiguously good."
And some more pretty charts:
Change in Total Nonfarm Private Employment by Company Size
Change in Total Nonfarm Private Employment by Selected Industry
Spot the housing boom: Change in employment construction:
Saving the best for last, here is ADP "infographic":