ADP Employment Report: Private Payrolls Down 20,000

In February, according to the ADP Employment Report, private sector payrolls fell by 20,000. This followed a downwardly revised decline of 60,000 over the month of January (previously a decline of 22,000). February’s drop was the smallest decline since payrolls began to fall at the start of 2008. The drop was entirely due to losses in construction sector payrolls. Manufacturing added 3,000 jobs, the first increase in over two years and services added 17,000 the second consecutive increase since following continually declines from the start of the recession. It is likely that the economy is on the verge of payroll expansion.

Of note is that the ADP estimate is likely to be quite different than the government report due out this Friday. Due to methodology differences, the large snow storms over the month that hit the east coast will likely have a significant downward effect on the government estimate and then a corresponding upward effect in the future March number. However, this factor is not significant in the ADP number.

Ch. in Payrolls (‘000s)	Feb	Jan	Dec	Nov	Oct	Sep
Total	-20	-60	-149	-125	-197	-234
Goods Producing	-37	-70	-88	-93	-121	-142
Manufacturing	3	-22	-37	-43	-76	-62
Services	17	10	-61	-32	-55	-92

10.03.03 (Source: Automatic Data Processing)