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Thursday, March 28, 2024

Anticipating the Employment Report for February

Courtesy of Doug Short.

The economic mover and shaker this week is the Friday employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, probably the most publicized in the near term being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository).

Today we have a February estimate of 212K new nonfarm private employment jobs from ADP.

The 212K estimate came in below the Investing.com forecast of 220K for the ADP number. ADP also made a substantial upward revision to its January estimate, from 213K to 250K.

The Investing.com forecast for the forthcoming BLS report is 234K nonfarm new jobs (the actual PAYEMS number).

Here is an excerpt from today’s ADP report:

Goods-producing employment rose by 31,000 jobs in February, down from 45,000 jobs gained in January. The construction industry added 31,000 jobs, the same number as last month. Meanwhile, manufacturing added 3,000 jobs in February, well below January’s 15,000.

Service-providing employment rose by 181,000 jobs in February, down from 20 6,000 in January. The ADP National Employment Report indicate s that professional/business services contributed 34,00 0 jobs in February, a drop-off from January’s 49,000. Expansion in trade/transportation/utilities grew by 3 1,0 00, a sharp decline from January’s 50,000. The 20,000 new jobs added in financial activities is an increase from last month’s 15,000 and marks the largest gain in that sector since March 2006.

“While February’s job gains came in slightly lower than recent months, the trend of solid growth above 200,000 jobs per month continued,” said Carlos Rodriguez, president and chief executive officer of ADP. “What is also encouraging is that job gains are broad-based across all key industries.”

Mark Zandi, chief economist of Moody’s Analytics, said, “Job growth is strong, but slowing from the torrid pace of recent months. Job gains remain broad-based, although the collapse in oil prices has begun to weigh on energy-related employment. At the current pace of growth, the economy will return to full employment by mid-2016.”

Here is a visualization of the two series over the previous twelve months.

The key difference between the two series is that the BLS series is for Nonfarm Payrolls while ADP tracks private employment.

For a sense of the critical importance of employment data for the economy, see my Big Four Economic Indicators, which I will be updating shortly after the employment report is published.

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