ADP Employment Report Shows 135,000 Jobs for May 2013

ADP's proprietary private payrolls jobs report shows a gain of 135,000 private sector jobs for May 2013.  ADP revised April's job figures down by 6,000 to a measly 113 thousand jobs.  Overall, May shows another month of more weak job figures.  This report does not include government, or public jobs.


adp graph of private jobs


All of the jobs gains were in the service sector where services added 138,000 private sector jobs.  The goods sector lost -3,000 jobs  Professional/business services jobs grew by 42,000 and was the largest growth services sector.  Trade/transportation/utilities showed strong growth again with 31,000 jobs.  Financial activities payrolls increased by 7,000.

Construction work added 5,000 jobs.   Manufacturing lost -6,000 jobs.  Graphed below are the month job gains or losses for the five areas ADP covers, manufacturing (maroon), construction (blue), professional & business (red), trade, transportation & utilities (green) and financial services (orange).



ADP is reporting a general slow down in hiring.  They blame increased taxes and the budget cuts as the cause.  ADP reports payrolls by business size, unlike the official BLS report.  Small business, 1 to 49 employees, added 74,000 jobs with establishments having less than 20 employees adding 44,000 of those jobs.

Medium sized business payrolls are defined as 50-499 employees, added they added 58,000 jobs.  Medium businesses, with between 50 and 499 employees, added 39 thousand jobs this month.  Large business added 39 thousand to their payrolls.   If we take the breakdown further, large businesses with greater than 1,000 workers, added a total of 33,000 jobs.  Thing is, we do not know if those are American workers or foreign guest workers on Visas and this time of year brings in more foreign workers due to the H-1B Visa issuances earlier in the year.  Other metrics showed large businesses not hiring Americans, in the United States.

Below is the graph of ADP private sector job creation breakdown of large businesses (bright red), median business (blue) and small business (maroon), by the above three levels.  For large business jobs, the scale is on the right of the graph.  Medium and Small businesses' scale is on the left.


ADP large, medium, small private sector jobs


One of the more interesting aspects of the ADP report is the breakdown of the private sector by service producing and goods producing jobs.  The service sector are disproportionately lower paying jobs as a whole in comparison to goods producing jobs, even while including the financial, professional and business services sectors are part of services.  Below is the graph of ADP service sector (maroon, scale left) jobs against their goods production jobs (blue, scale right).


service sector vs. goods adp


This report, if it matches Friday's official unemployment report, would overall imply overall not enough job growth to keep up with population, as this is just the private sector job growth.   Government jobs will surely be negative due to sequester.  The U.S. needs about 115,000 jobs per month, minimum just to keep up with population growth, with the same lousy, artificially low, labor participation rates.

The monthly BLS jobs survey (CES) has a 100,000 payroll jobs overall margin of error.  ADP changed their methodology and now claim to match the BLS private payrolls, but only historically, after revisions.  The below graph shows shows how many private sector payroll jobs, each month, ADP was off by in comparison to what the BLS reported.   This is a monthly graph, not cumulative.  As we can see, it's been rare where the two monthly reports get the exact same private payrolls growth numbers.   When the below graph bar is negative, that means the BLS reported a larger number of private jobs than ADP did, when the graph bar is positive, it means ADP reported larger private payrolls.  Again, compared are private sector jobs which is different from the BLS headline number.   The graph will be updated with the May BLS jobs report.




Below is the cumulative difference between what the ADP reports as the private nonfarm payroll jobs vs. the BLS (ADP minus BLS).  This line shows the divergence, over time in number of nonfarm private payroll jobs reported between the two reports.  Previously the difference between ADP and BLS was around 400,000, now we see the cumulative error more in line with the real BLS CES survey margin of error.  Here again we see a massive change in the ADP private payrolls methodology and benchmarking.  ADP claims their private payrolls cover 24 million jobs with 416 thousand businesses in the U.S.   The graph will be updated with the May BLS private non-farm payrolls data.


ADP vs. BLS private payrolls


The graph below is the monthly change of private jobs as reported by ADP.  At the absolutely bare minimum, the United States needs 1.2 million jobs per year, or 100,000 per month, total jobs, including public sector jobs, to keep up with additional new workers in the labor supply caused by population growth with the current terrible labor market conditions assumed.



Regardless of the statistical differences between ADP and the BLS, these payroll figures are none too swell, especially with America's five year, three months employment crisis.

Here is our overview of last month's ADP private sector jobs report overview, only graphs revised.  This article goes into the methodology details on the ADP report changes and compares historical data of the two methodologies in graphs.

ADP themselves have really improved the visuals on their website for more perspectives, breakdowns and charts of their statistics.

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Any doubt our country is in shambles? Thanks everyone in power

Brutality rules the day. Anyone that doesn't have a heart for their fellow Americans living through these times is amoral or just plain heartless. Looking around now, people that think just because they still have a gig in govt. or some business that they can still house and feed their families on without seeing our downfall is clueless. Even many of those jobs will soon be gone or lowering pay because tax base is shrinking daily. Too many people across every strata struggling for anything. College and grad school graduates unemployed or working gigs that pay what they paid in the 1990s; many of those jobs could be done by high school kids too. DOJ now only hires "interns" to work for free (they are ramping up that scam). Why the DOJ even hires anyone is beyond me considering Holder specifically said big bankstas won't be prosecuted (aka abrogation of one's duty to the law, law enforcement, and taxpayers paying DOJ salaries). And yet we need more labor arbitrage aka more cheap labor and visa recipients because damn it, with labor participation rates at record lows, big corporations/the govt. just can't find any Americans, really, they are really looking (blind as bats apparently). And to those poor Americans (literally and figuratively) who had the misfortune of being over 30 and can't get through Taleo and HR games and are unemployed now for 3, 4, 5+ years (despite military service, etc.), i wish I knew what to say.

Anyway, as long as big bankstas and CEOs of big corp. multinationals keep making beaucoup cash and stabbing us in our backs, here's to more of the same. Remember, if Dimon, Corzine, Blankfein, the Clintons, Obama, the GOP and everyone else doesn't party with you at their Davos or Hampton gatherings in the winter and summer, YOU DON'T MATTER. But hey, will the next generation of Clintons be a public servant? No need to be a teacher or cop or nurse for 30 years, just go right to being a Senator. Will the next generation from this or that GOP family follow in his Mommy's or Daddy's footsteps?

Who cares. Rinse, repeat, rinse, repeat, they get richer without ever worrying about jobs, we get boned. New decades, same story. $ + corruption talks, patriotism and care for your fellow human beings means nothing to them.

jobs immigration

Like it or not, immigration affects the labor supply. It is not static but over and over again, this is a fundamental truth and it is repressed wages as the general rule, worker displacement.

So, our Congress is ramming through "Comprehensive Immigration Reform", with more guest worker Visas than there are jobs in total, and America's workforce be damned.

So glad to see you back Kurtz! I missed your blazing commentary.

I had to take a long break, too much reality for one American

Only so much any American can handle. I'm going to take more breaks and not comment so often just for my own poor American psyche. Too much corruption, news, and being locked out of any input/change will crush anyone these days, gotta stay semi-civilized. Thinking about this with no recourse takes a toll on everyone out here, all of us locked out of power are in this beast together.


Well, the first step is to pipe up, although I hear ya, it is incredible how facts do not penetrate the DC bubble.

Chicago Fed blatant BS on jobs needed to improve situation

The Chicago Fed said now only 80,000 jobs/month are needed to "steady" US unemployment. The lies are obvious when the Fed cited lower population growth and saw an already declining UE rate. Interesting, apparently these people earning good $ for being clueless ignored immigration increasing and the UE rate not decreasing but in fact simply ignoring the labor participation rate that is reaching decades-low levels. 80,000/month? The Fed sees everyone just retiring early (because they all must be super-rich), people not looking for work, no more immigration (they should talk to Congress, word is some laws now being passed actually have something to do with this and would increase immigration markedly), etc.

Close to 2 million college grads every year alone enter the market, but 80,000/month is now the new requirement for the entire market? Propaganda and lack of logic obvious. More unemployed, more immigration, lower participation rate, but the numbers drop? Companies not creating jobs (despite their "job creator" status) and same with govt = nothing good for long time.

they are going off of low participation rates

So, that's bogus. They try to claim that people are retiring and the "socioeconomic aspects of society" are changing. It's BS. The Population growth is primarily from immigration, which implies a disproportionate number of working age people.

Yet another deep number crunch to prove this crud wrong. I agree, they will do anything to deny the job crisis.