ADP National Employment Report: 33K Private Jobs Unexpectedly Lost in June

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 forecast for the forthcoming BLS report is that 110,000 jobs were added in June. 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 revealed that 33,000 nonfarm private jobs were unexpectedly lost in June, down from the 29,000 addition in May. This is the first monthly reduction since March 2023 when there was a decline of 53,000 jobs. The latest reading was lower than the expected 99,000 addition.

Here is a visualization of the two series over the past twelve months. There is no correlation between the ADP and BLS employment report.

ADP employment versus BLS employment

Here is an excerpt from today's ADP report press release:

"Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month. Still, the slowdown in hiring has yet to disrupt pay growth."

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 79,000, the lowest level in nearly five years.

ADP Nonfarm Private EmploymentAs 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 875,000 and has recently dropped back to pre-pandemic levels.