After last month’s shockingly low jobs report, this month should shoot up again, according to the ADP National Employment Report, produced by the ADP Research Institute in collaboration with Moody’s Analytics.
The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. It is scheduled for official release Friday, July 8.
Last month, ADP’s last payroll survey reported an increase in the private sector employment of 173,000 in May, up from the 166,000 increase in April, however the report was missing one important factor; the Verizon strike.
Even with that information, it would have lowered numbers to about 120,000. Last month, however, nonfarm payroll employment changed very little with an increase of 38,000, according to the U.S. Bureau of Labor Statistics.
Goldman Sachs response?
“This is an outlier because it’s not really consistent,” Goldman Sachs Chief Economist Jan Hatzius said.
This month, ADP predicts an increase of 172,000.
“Job growth revived last month from its spring slump,” Moody’s Analytics Chief Economist Mark Zandi said. “Job growth remains healthy except in the energy and trade-sensitive manufacturing sectors.”
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(Source: ADP, Moody’s Analytics)
“Large multinationals are struggling a bit, and Brexit won’t help, but small and mid-sized companies continue to add strongly to payrolls,” Zandi said.
Payrolls for businesses with 49 or fewer employees increased by 95,000 jobs in June, up from 84,000 in May. Employment at companies with 50 to 499 employees increased by 52,000 jobs, down from last month’s 60,000. Employment at large companies, those with 500 or more employees, increased by 25,000, up from May’s 23,000. Companies with 500 to 999 employees added 21,000 and companies with more than 1,000 employees added 4,000 this month.
When looking at specific industries, goods-producing employment decreased by 36,000 jobs in June after a loss of 5,000 jobs in May. The construction industry lost 5,000 jobs, after May’s gain of 9,000 jobs. Meanwhile, manufacturing lost 21,000 jobs after losing 3,000 the previous month.
Service-providing employment increased by 208,000 jobs in June, up from May’s 173,000 jobs. The report indicates that professional/business services increased by 51,000 jobs, up from May’s 47,000. Trade/transportation/utilities increased by 55,000, nearly twice that of the 27,000 jobs added the previous month. Financial activities added 2,000, down from last month’s gain of 13,000 jobs.
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(Source: ADP, Moody’s Analytics)
“Since the start of 2016, average monthly job creation has slightly dropped,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute. “Lackluster global growth, low commodity prices, and an unfavorable exchange rate continue to weigh on U.S. companies, especially larger companies.”
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(Source: ADP, Moody’s Analytics)
