ADP Private Payrolls Fall Short

The 135,000 September ADP private payrolls rise just missed the 140,000 expected but was higher than the 117,000 private Bureau of Labor Statistics (BLS) payroll estimate with a 100,000 nonfarm payroll increase expected.

There was a trimming in the August ADP rise to 228,000 from 237,000 that narrowed the gap to the 165,000 private payroll increase in that month. There was a solid 48,000 September goods employment rise that tracks firm factory sentiment readings, with gains of 29,000 for construction,18,000 for factories, and 1,000 for mining, but service sector employment only rose by 88,000.

Action Economics said that “workers are generally included in ADP payrolls even if they miss work due to bad weather, whereas workers are only counted as working in the BLS payroll report if they worked during the BLS survey period.” Therefore, the ADP weather impact is usually much smaller than the BLS impact. The “as reported” ADP figures have overshot private payrolls in every month since last October’s methodology change except April, June, and July, leaving an average overshoot of a hefty 42,000 and an average monthly 2017 gain of 223,000.

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