The economic mover and shaker this week is Friday's employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, the most publicized being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository). However, each month a few days before we receive the highly anticipated jobs report, ADP releases their data on new nonfarm private jobs.
The ADP employment report showed that 177K nonfarm private jobs were added in August, a slow down from the 312K jobs added last month. The latest figure is lower than the expected 195K new private jobs and is the smallest monthly increase since March.
The forecast for the forthcoming BLS report is that 150,000 private nonfarm jobs were added in August. However, the forecast for the full nonfarm jobs (the PAYEMS number) is for 170,000 jobs to have been added. Here is a visualization of the two series over the past twelve months.
Here is an excerpt from today's ADP report press release:
“This month's numbers are consistent with the pace of job creation before the pandemic,” said Nela Richardson, chief economist, ADP. “After two years of exceptional gains tied to the recovery, we're moving toward more sustainable growth in pay and employment as the economic effects of the pandemic recede.”
Here is a snapshot of the monthly change in the ADP headline number since the company's earliest published data with the new methodology in 2010. This is quite a volatile series, so we've plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend. The latest six-month moving average is 274,000, down from last month's 288,000.
As we see in the chart above, the trend peaked in September 2015 and then went negative for the first time in late 2019, just before the NBER declared a recession start. The COVID-19 pandemic has brought employment numbers down to levels we have never seen this century. The trend reached a new high in 2021 at 778,000 and has recently dropped back to pre-pandemic levels.
