ADP National Employment Report: 107K Private Jobs Added in January
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 107K nonfarm private jobs were added in January, a slowdown from the 158K private jobs added in December. The latest figure is lower than the expected 145K new private jobs.
The forecast for the forthcoming BLS report is that 145,000 private nonfarm jobs were added in January. However, the forecast for the full nonfarm jobs (the PAYEMS number) is for 173,000 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:
“Progress on inflation has brightened the economic picture despite a slowdown in hiring and pay,” said Nela Richardson, chief economist, ADP. “Wages adjusted for inflation have improved over the past six months, and the economy looks like it's headed toward a soft landing in the U.S. and globally.”
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 125,000, down from last month's 159,000 and the lowest level since October 2020.
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.