,April 6, 2025
As shown above the ADP survey shows a respectable correlation with the private sector portion of the payroll employment data to be released a couple of days later. And well it should. ADP, or Automatic Data Processing, Inc. is a provider of payroll-related services. Currently, ADP processes over 500,000 payrolls, for approximately 430,000 separate business entities, covering over 23 million employees. The survey has been in existence since January 2001, and its average error in the past couple of years has been 87 thousand.
The ADP report showed a solid jobs gain of 155 thousand in March after climbing 84 thousand in February and 186 thousand in January. In the past three months the average monthly increase is 142 thousand.
.Nela Richardson, the Chief Economist for ADP said, “Despite policy uncertainty and downbeat consumers, the bottom line is this: The March topline number was a good one for the economy and employers of all sizes, if not necessarily all sectors.”
Payroll employment has slowed gradually with job gains currently averaging 200 thousand per month. The labor market remains roughly in balance, but angst about the new Administration’s plans with regard to tariffs, layoffs of federal workers, and deportation of illegal immigrants have made some employers nervous about additional hiring until the future course of the economy becomes more clear.
Given the ADP report, we are looking for payroll employment to rise by 150 thousand in March. We will get that report from the BLS on Friday. We also expect the unemployment rate to be unchanged at 4.1%.
Stephen Slifer
NumberNomics
Charleston, SC
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