Private payrolls grow by 428,000 but miss expectations

Private payroll growth came in well below expectations for August, according to a Wednesday report from ADP, whose job numbers differed widely from the government during the coronavirus pandemic.

Companies added 428,000 jobs during the month, well below the estimate of 1.17 million economists surveyed by the Dow Jones despite a jump over the lackluster 212,000 that ADP measured for July.

Large firms dominated job creation, with firms with more than 500 employees adding 298,000 workers. Medium-sized firms came next with 79,000 while firms with fewer than 50 employees grew by 52,000.

Job creation skewed significantly to services, which added 389,000 compared to 40,000 for commodity producers. (Total does not reach 428,000 due to rounding).

After being delayed during the first part of the epidemic recovery, leisure and hospitality created 129,000 new jobs while education and health services contributed 100,000 and professional and business services grew by 66,000. Construction added 28,000 and manufacturing increased 9,000.

Markets did not react much to the report, as equity futures indicated a positive opening on Wall Street and government bond yields rose higher.

“The job gains are minimal, and companies of all sizes and sectors are yet to come close to the employment levels they were before COVID-19,” said Ahu Yildirmaz, vice president and co-chair of ADP Research.

ADP numbers have lagged the government census since the pandemic began in March. The July total was revised upwards from the initial estimate of 167,000, but still well below the Bureau of Labor Statistics Nonfarm Payroll count of 1.76 million. For the month of June, ADP initially reported growth of 2.4 million, then revised it down to nearly 4.5 million, and the May total was initially a loss of 2.76 million which was later revised up to a gain of 3.34 million.

READ  Kyle Higashioka's straightforward coronavirus method for Yankees' MLB restart

Mark Zandi, chief economist at Moody’s Analytics, which collaborates with ADP on the report, said after the July release that the reviews were simply related to the number of BLS.

Economists expect Friday’s government non-farm payrolls report to show gains of 1.32 million in August.

Leave a Reply

Your email address will not be published. Required fields are marked *