ADP reported non-farm private jobs growth at 217,000. The rolling averages of year-over-year jobs growth rate remains strong but the rate of growth continues in a downtrend (although insignificant this month).
ADP changed their methodology starting with their October 2012 report, and ADP’s real time estimates are currently worse than the BLS.
Per Mark Zandi, chief economist of Moody’s Analytics:
Job growth remains strong and steady. The current pace of job creation is twice that needed to absorb growth in the working age population. The economy is fast approaching full employment and will be there no later than next summer.
Per Ahu Yildirmaz, VP and head of the ADP Research Institute.
The strongest gains in the service sector since June led to greater employment growth in November. The increase was driven in large part by a rebound in professional/business service jobs.”
Jobs growth of 150,000 or more is calculated by Econintersect to the minimum jobs growth to support population growth (see caveats below). The graph below shows ADP employment gains by month. A graph in the caveats section below compares ADP employment to BLS.
Employment is a rear view indicator, and looking at this ADP data – the overall trend for the year-over-year rate of growth has been flat since mid-2010. (red line in graph below).
ADP Non-Farm Private Employment – Total (blue line) and Year-over-Year Change (red line)
Small and medium sized business historically create most of the new jobs (analysis here) when using the ADP data. A continuing take from the ADP data is that small and medium size business continue to be the employment driver. However, the BLS totally disagrees (see caveats below). The current ADP methodology is showing more jobs growth in big business (and therefore less in small business). Likely they are slowly correcting their data base.
