January 8, 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 122 thousand in December after climbing 146 thousand in November.. The employment gains currently are slightly smaller than they were a year ago.
.Nela Richardson, the Chief Economist for ADP said, “The labor market downshifted to a more modest pace of growth in the final month of 2024, with a slowdown in both hiring and pay gains. Health care stood out in the second half of the year, creating more jobs than any other sector.”
Payroll employment has slowed gradually with job gains currently averaging 130 thousand per month. The labor market appears to have shifted from being exceptionally tight to being roughly in balance.
Given the ADP report, we are looking for payroll employment to rise by 125 thousand in December. We will get that report from the BLS on Friday. We also expect the unemployment rate to decline 0.1% to 4.1%.
Stephen Slifer
NumberNomics
Charleston, SC
Follow Me