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Friday, October 3, 2014

ADP Report: +213,000 More Private Sector Jobs in September

The private payroller processor ADP released its monthly employment report this Thursday morning, October 2, 2014, and estimated 213,000 new private payroll jobs in the month of September.  

All September 2014 Jobs Reports Listed HERE.

The ADP report usually precedes the official BLS report by a day or two.  The ADP report only reports private job growth and doesn't contain as much information as the BLS report.  However, it is usually a good harbinger of the BLS report.  This morning ADP says that 213,000 new private payroll jobs were added in September 2014.

Last month, however, the ADP estimated 240,000 more private sector jobs in August, but the BLS subsequently reported that only 134,000 private sector jobs had been added.  (ADP has revised its original estimate of 240,000 jobs in August down to 202,000.) 

ADP's Estimate of Private Sector Job Growth from Sep 2013 to Sep 2014

How many jobs do we need for vibrant job growth?  

For years now, since Obama took office, the "pundits" had been declaring that we needed at least 200,000 new jobs per month to consider that we had any kind of momentum in terms of job growth. But, now that we have had 200+ new jobs in 15 of the past 23 months (and in 8 out of the last 11 months), the "pundits" have been saying things like "the pace of hiring has slowed." when we drop below 200,000 jobs for a month, as we did last month.

For instance, here's a comment from 
"September jobs growth is expected to be back on track after a dip in August, with 215,000 nonfarm payrolls created in a broad range of industries.  Retail workers that were temporarily striking in the Northeast in August could show up as an additional 17,000 jobs in September, but they could be offset by the loss of about 8,000 jobs in the leisure industry from the shutdown of casinos in Atlantic City, N.J., economists said."

My problem with this paragraph is that the author doesn't seem to understand how FEW 8,000 or 17,000 jobs really are in the grand scheme of things.  In July, for instance (we don't yet have data for August), 4.9 MILLION people were hired.  1.7 MILLION people were laid off or fired, with 2014 on track to be the year with the LOWEST number of layoffs or firings since the BLS has tracked this data, starting in 2000.  So the 17,000 jobs in retail in the Northeast or the 8,000 casino jobs in Atlantic City should have a negligible impact on the month's jobs numbers.

To summarize, the pundits are predicting that hiring will jump back above 200,000 for September, to somewhere in the vicinity of 210,000 to 215,000.  They also think there will be an upwards revision of the August numbers.  (August is always a tricky month for jobs numbers as summer workers (often students) leave their jobs and the employment market to get settled at school, and teachers and other school employees are often not yet hired by the middle of the month, when the BLS takes its August count.)

How is job growth doing this year?  Compare this ADP chart, from September 2013, with the chart above, from September 2014.  Notice that the this chart goes up to 350 thousand, whereas the chart above only goes up to 300 thousand.
ADP's Estimate of Private Sector Job Growth from Sep 2012 to Sep 2013

Read the whole report HERE.

All September 2014 Jobs Reports Listed HERE.

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