ADP report: 201K jobs added to private sector in August

posted at 9:21 am on September 6, 2012 by Ed Morrissey

Two key indicators on employment show a hint of moderate job growth for August 2012, one day ahead of the official report from the Bureau of Labor Statistics.  First, weekly jobless claims dropped slightly to 365,000 last week, according to the Department of Labor:

In the week ending September 1, the advance figure for seasonally adjusted initial claims was 365,000, a decrease of 12,000 from the previous week’s revised figure of 377,000. The 4-week moving average was 371,250, an increase of 250 from the previous week’s revised average of 371,000.

The advance seasonally adjusted insured unemployment rate was 2.6 percent for the week ending August 25, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending August 25 was 3,322,000, a decrease of 6,000 from the preceding week’s revised level of 3,328,000. The 4-week moving average was 3,320,750, a decrease of 3,500 from the preceding week’s revised average of 3,324,250.

That’s still within the same 360-380K band we’ve seen from this series for the last 17 months.  The one-week drop wasn’t enough to outweigh increases in the previous three weeks, which is why the rolling average edged up slightly.  However, all of these changes are within the range of statistical noise.  None of them indicate a serious move in any direction except continuation of the status quo.

Next, ADP released its projection of job growth in the private sector, which offers better news:

Employment in the U.S. nonfarm private business sector increased by 201,000 from July to August, on a seasonally adjusted basis. The estimated gain from June to July was revised up from the initial estimate of 163,000 to 173,000.

Employment in the private, service-providing sector expanded 185,000 in August, up from 156,000 in July. Employment in the private, goods-producing sector added 16,000 jobs in August. Manufacturing employment rose 3,000, following an increase of 6,000 in July.

Employment on large payrolls—those with 500 or more workers—increased 16,000 and employment on medium payrolls—those with 50 to 499 workers—rose 86,000 in August. Employment on small payrolls—those with up to 49 workers—rose 99,000 that same period. Of the 86,000 jobs created on medium- sized payrolls, 12,000 jobs were created by the goods producing sector and 74,000 jobs were created by the service-providing sector.

The problem with ADP is that it usually overshoots the mark significantly. The use of ADP works better as a trend indicator rather than as a precise predictor of BLS outcomes.  Last month, however, the unadjusted number was identical to the overall addition of 163K jobs to the economy.  This month, the ADP number is slightly higher, which means one has to determine whether to buy into the trend and expect something similar from tomorrow’s report, or whether to fall back to the ~60% figure that eliminates the normal overstatement from ADP.

At least one economist is going with the latter, according to CNBC:

Economists could ratchet up current expectations of 125,000 new jobs and an unchanged unemployment rate of 8.3 percent, though the jobs picture remains cloudy.

“We still have a long ways to go, and given our macro forecast for the rest of the year into next year I’m not expecting a further acceleration in the monthly employment gains,” Joel Prakken, chairman of Macroeconomic Advisors, told CNBC.

Prakken said the ADP number could suggest a “slight decline” in the jobless rate.

Wall Street had been expecting ADP to show about 145,000 new jobs.

However, the Gallup survey — which mirrors the same techniques as the BLS — comes to the opposite conclusion, expecting a slight tick upward in the jobless rate:

U.S. unemployment, as measured by Gallup without seasonal adjustment, is 8.1% for the month of August, down slightly from 8.3% measured in mid-August and 8.2% for the month of July. Gallup’s seasonally adjusted unemployment rate for August is also 8.1%, a slight uptick from 8.0% at the end of July. …

U.S. unemployment declined significantly during the first part of the year, but August marks the third straight month with little change in the unadjusted number. Gallup’s estimate of adjusted unemployment has increased by 0.3 percentage points since June. Despite the lackluster jobs growth, August’s 2012 unadjusted and adjusted unemployment are each more than a full point lower than they were in August 2011.

Underemployment, as measured without seasonal adjustment, was 17.1% in August, unchanged from the end of July but significantly improved from 18.5% a year ago. Gallup’s U.S. underemployment measure combines the percentage who are unemployed with the percentage of those working part time but looking for full-time work. Gallup does not apply a seasonal adjustment to underemployment. Demographic breakouts of Gallup’s U.S. unemployment and underemployment numbers for August are found on page 2.

Two weeks ago, Gallup was seeing an uptick in unemployment, which may have smoothed out as the back-to-school season approached.  We’ll see soon enough.

Let’s offer the same poll on job additions in tomorrow’s report that we’ve used the last few months.  I’ll predict an addition of 121,000 jobs, with the jobless rate remaining 8.3%.  What do you think tomorrow’s job additions will be?


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Again, I’ve been saying for months that the economy is going to be a mixed bag for us. A toss up. Many voters will think O is best on the economy, or they will look beyond the economy to make up their mind. Emphasize the out of control govt that O has spawned, and Obamacare.
But we probably can’t win on the economy and these issues alone. We need to raise the visibility on two issues that only help us. Immigration and gay marriage.
Ok, forget immigration. Just do gay marriage. Make an issue of it. Because there are no votes to be lost among the swing demographic that is relevant. There are a lot of votes to be gained if Mitt stands up with resolve for traditional marriage. But take my word for it, Mitt will not gain these Dem leaning pro traditional marriage independent votes if he seems to be purposely silent on the issue… no, it won’t help if Mitt seems to be an “evolver” just like O. Take a stand.

anotherJoe on September 6, 2012 at 10:35 AM

Even a modest decrease in the U3 rate will likely be the end of Romney. The Obama team will sell it as proof things are turning around and the average voter will buy it.

I’m going to go kick myself in the nuts for a while.

vinylsquares on September 6, 2012 at 9:41 AM

Yes, dear, coz the kardashian type of voters who represent s majority in this country know what u3 rate is and or how to interpret stats….sheesh…

jimver on September 6, 2012 at 10:38 AM

1st consider the source of the 200k. I do not believe its so. Wait till it is revised downward after te DNC. The tell me it is good news.365 lost in one week and 200,000 gained in one month.

democratsarefools on September 6, 2012 at 10:38 AM

My railroad still has people laid off nationwide, and railcar loading is flat…

No recovery anytime soon, and we are a leading indicator…

Khun Joe on September 6, 2012 at 10:39 AM

anotherJoe on September 6, 2012 at 10:35 AM

Oh, my…here we go again, the ghey thing..give it a break already…

jimver on September 6, 2012 at 10:41 AM

gumbyandpokey on September 6, 2012 at 9:37 AM
You’re funny and I like you.

Bishop on September 6, 2012 at 9:40 AM

Which? The gumby or the pokey?

Bmore on September 6, 2012 at 9:46 AM

Well, he’s split personality most of the time, so both personas are equally legit in his case…depends which one of the two voices he hears louder in his head on any given day..

jimver on September 6, 2012 at 10:48 AM

Oh, my…here we go again, the ghey thing..give it a break already…
jimver on September 6, 2012 at 10:41 AM

No one has disputed the substance of my analysis, that there are hordes of Dem leaning independent voters that potentially could switch to R on that issue, and, at the same time, there are essentially no swing voters that will switch to O if Romney takes even a moderately vocal stand for traditional marriage. I don’t even think that it is fringe or outrageous to suggest that Romney do that. And Romney’s history of being against discrimination will work to insulate him from the leftist “homophobe” charges as he simply stands up for marriage.
Anyway, if you can present a voter analysis or just some logic that suggests I’m wrong on the gay issue, good, I’m 100% open to hearing it. Maybe you are right. I could change my view, as my only goal is to win the election.

anotherJoe on September 6, 2012 at 11:02 AM

Here’s a new winning theme for the democratics: Vote Black

slickwillie2001 on September 6, 2012 at 11:06 AM

I fully expect the numbers to be fudged enough to give Obama his expected bump. I read that he already knows the number and will say something in a round about way tonight. If it’s bad he will try to blame someone if it’s good expect him to be touting it. Watch for the signals in his speech. You look because I have no intention of listening to him…

sandee on September 6, 2012 at 11:16 AM

A few referred to the fact that Obama will know the jobs numbers when he gives the speech according to the WSJ article referenced.

Speculation goes to the question of whether Obama and his posse can manipulate the numbers. These BLS stats cannot — so it seems — be “manipulated, but the numbers for a month are revised in the ensuing two months before they are put to bed.

The article and three sequential comments are worthy of your attention. Sadly, while they seem to add “facts” they also add confusion and contradiction.

4:49 pm September 5, 2012
Charles Jones wrote:

The US government has many faults…but compromising important economic data releases is not one of them. Your opening claim that Obama will know the jobs number Thursday night is a complete speculation on your part and there is not a bit of evidence to support your claim. By the way, I am a conservative Republican who has never had a single good word about Obama, but I did spend 40 years on the Street and know something about this subject. How about we stick to what we actually know.

5:02 pm September 5, 2012
Dan Frisch wrote:

It’s true. Obama will know the contents of the Friday morning jobs report about 5:00pm Thursday afternoon. That’s the law, and has been for about 50 years. (The purpose is that it allows him, if necessary, to warn the Treas. Sec’y, etc, etc.,to get ready if the report is so extreme that it might move markets.) By the same law, he’s not allowed to say anything about it publicly until after the report comes out. And, of course, he’s not allowed to ask the Labor Dep’t for any changes at all in the report.

5:02 pm September 5, 2012
Mary wrote:

Since the official unemployment figures omit those who have given up looking for work, those who are working at part-time or low pay jobs, and the figures are always revised later, what difference does that make at this point in time? The only sure thing the prez will say is to state that things are better. He’s lied so many times that who believes him except the clueless?

The War Planner on September 6, 2012 at 11:51 AM

New poll shows Romney down by 7 points…in New Jersey.

steebo77 on September 6, 2012 at 9:35 AM

From that poll…hmmmmm:

“Gov. Mitt Romney trails President Barack Obama by 7 points in blue, blue New Jersey. Is it a post-convention bounce for Romney and will the president get his own bounce this week?” asked Maurice Carroll, director of the Quinnipiac University Polling Institute.”

ziggyville on September 6, 2012 at 11:57 AM

Even if the ADP number were doubled, it would not bring UE below 8%, and that’s what we need to focus upon: the semester is over and the grade at this time is below passing. That’s the melody – pick your harmonies to go with it.
Fat lady is gargling backstage…

DublOh7 on September 6, 2012 at 11:59 AM

Obama took a vote and the rate will be 4.2% it passed with a 2/3 majority voice vote and will be here for the next 100 years just like that plant in Wisconsin.

So it is spoken, so it is done.

petunia on September 6, 2012 at 12:49 PM

ADP report: 201K jobs added to private sector in August

Even if true, the 201K figure is about 154K short of what the country needs just to “tread water” by providing enough jobs for new workers entering the job market.

The “unemployment” reporting is just happy talk which bears no relation to reality. The true unemployment rate is well into double digits and everyone knows it.

landlines on September 6, 2012 at 12:54 PM

Keep in mind that the more precise unemployment rate for July, as the Obama administration was quick to point out, was 8.254%, which rounded up to 8.3%. It will only take a drop of 0.05% to push the unemployment rate down to 8.2%. Hence, I would not be surprised to see 8.2% tomorrow.

vamoose on September 6, 2012 at 1:25 PM

Election time is getting closer. I predict 225,000+ jobs added.

xblade on September 6, 2012 at 1:39 PM

No one has disputed the substance of my analysis, that there are hordes of Dem leaning independent voters that potentially could switch to R on that issue, and, at the same time, there are essentially no swing voters that will switch to O if Romney takes even a moderately vocal stand for traditional marriage.

anotherJoe on September 6, 2012 at 11:02 AM

LOL….I bet you’re on suicide watch, too.

DevilsPrinciple on September 6, 2012 at 2:52 PM

+ one million jobs, unemployment 2%, to be revised upwards in December.

Who releases these numbers again? They can easily cook the books.

nazo311 on September 6, 2012 at 4:47 PM

Keep in mind that the more precise unemployment rate for July, as the Obama administration was quick to point out, was 8.254%, which rounded up to 8.3%. It will only take a drop of 0.05% to push the unemployment rate down to 8.2%. Hence, I would not be surprised to see 8.2% tomorrow.

vamoose on September 6, 2012 at 1:25 PM

Dang. Buzz Kill.

(That means I agree)

petunia on September 6, 2012 at 5:19 PM

8.2% tomorrow.

vamoose on September 6, 2012 at 1:25 PM

Success!!

/

CW on September 6, 2012 at 8:15 PM

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