July 3, 2024
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 jobs gain of 150 thousand in June versus an increase of 157 thousand in May.. The employment gains on this report have been fairly steady for the past year.
.Nela Richardson, the Chief Economist for ADP said, ““Job growth has been solid, but not broad-based. Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month.”
Payroll employment has been surprisingly robust in the past three months with job gains averaging 230 thousand per month. Any way one slices it the labor market is still very tight.
Given the ADP report, we are looking for payroll employment to rise by 200 thousand in June We will get that report from the BLS on Friday. We also expect the unemployment rate to decline 0.1% to 3.9%.
Stephen Slifer
NumberNomics
Charleston, SC
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