ADP Sets Strong Stage for Labor Department Payrolls

December 6, 2017 by Jon C. Ogg

It is no secret that economic growth has picked up in 2017, and it is no secret that the employment picture is looking better than it has at any point since the Great Recession. ADP’s monthly payrolls report is often used as a bias-generation preview for the key monthly payrolls and unemployment data from the U.S. Department of Labor.

ADP announced on Wednesday morning that private sector payrolls increased by 190,000 in November. That is above the 175,000 that was project by Dow Jones and the consensus target of 185,000 published by Reuters.

The monthly gains in payrolls were dominated by midsized businesses, which have 50 to 499 employees. That group added 99,000 of the total 190,000. Small businesses added 50,000 jobs and large businesses added 41,000 jobs.

The biggest gains, as usual, were in the services sector:

  • Trade/transportation/utilities, 36,000
  • Information, −13,000
  • Financial activities, 7,000
  • Professional/business services, 47,000
  • Professional/technical services, 8,000
  • Management of companies/enterprises, 2,000
  • Administrative/support services, 38,000
  • Education/health services, 54,000
  • Health care/social assistance, 31,000
    Education, 23,000
  • Leisure/hospitality, 25,000
  • Other services, −2,000

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said:

The labor market continues to grow at a solid pace. Notably, manufacturing added the most jobs the industry has seen all year. As the labor market continues to tighten and wages increase it will become increasingly difficult for employers to attract and retain skilled talent.

Mark Zandi, chief economist of Moody’s Analytics, said:

The job market is red hot, with broad-based job gains across industries and company sizes. The only soft spots are in industries being disrupted by technology, brick-and-mortar retailing being the best example. There is a mounting threat that the job market will overheat next year.

As far as what is expected from the key employment on Friday, the Reuters poll for total nonfarm payrolls is 200,000. Dow Jones has a consensus estimate of 195,000. October’s gain was up at 261,000.

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