ADP: 215K jobs added in December

posted at 9:41 am on January 3, 2013 by Ed Morrissey

Tomorrow will bring the monthly jobs report from the Bureau of Labor Statistics, so today we have a few indicators to get a hint as to what may come.  The preliminary numbers from ADP look promising, although they usually overshoot the mark.  According to the payroll-processing firm, the private sector added 215,000 jobs in December:

Private sector employment increased by 215,000 jobs from November to December, according to the December ADP National Employment Report®, which is produced by Automatic Data Processing, Inc. (ADP®), a leading provider of human capital management solutions, in collaboration with Moody’s Analytics.  The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis.  The November 2012 report, which reported job gains of 118,000, was revised upward by 30,000 to 148,000 jobs.

Small businesses didn’t do much hiring, only adding 25,000 positions — and small businesses of less than 20 employees actually lost 6,000 jobs.  The goods-producing sector looked weak with only 28,000 jobs added, as manufacturing dropped by 11,000 jobs.  The service sector looked relatively strong, however:

Service-providing jobs increased by 187,000.  Among the service industries reported by the ADP National Employment Report, trade/transportation/utilities services had the largest gain with 53,000 jobs added over the month.  Professional/business services added 37,000 jobs and financial activities added 14,000 jobs in December.

Although the 215K level would indicate actual growth in terms of population expansion, which requires roughly 125K a month just to keep pace, it’s still far below the kind of robust pace necessary to put the millions of Americans forced out of the workforce back to work.  It is the highest level for ADP’s report since February of last year, when the job market was mildly improving.  However, assuming that ADP’s report accurately reflects tomorrow’s BLS report, we would have to have 89 months of this kind of growth over population expansion to re-employ 8 million of those who left the workforce over the last four years.

Gallup’s estimate also looks mildly optimistic:

The U.S. Payroll to Population employment rate (P2P), as measured by Gallup, was 44.4% for the month of December, a slight improvement over 43.7% in November. The current P2P rate still does not match the levels of employment seen in July through October, which exceeded 45% and were the highest since Gallup began tracking P2P in January 2010. …

Gallup’s seasonally unadjusted unemployment rate for the U.S. workforce was 7.7% for the month of December, statistically unchanged from 7.8% at the end of November. Gallup’s seasonally adjusted unemployment rate is 7.9%, a 0.4-point decline over November. Gallup calculates a seasonally adjusted unemployment rate by applying the adjustment factor the government used for the same month in the previous year. Last year, the government adjusted December up by 0.2 points.

Underemployment, as measured without seasonal adjustment, was 17.1% in December, unchanged from 17.2% at the end of November. Still, underemployment improved more than a point over December of 2011, when the rate was 18.3%.

Their P2P rate should not be confused with the workforce measures from the BLS.  Gallup compares the population as a whole to the employment rate, while the BLS uses two calculations to measure employment to the workforce and to the workforce-eligible population. They have only used the P2P rate for less than three years, which means that a “high” in this series doesn’t mean much, since it began during near-record lows for workforce participation.  Still, the move slightly downward in unemployment gives a glint of optimism, depending of course on workforce measures.

Finally, the weekly jobless claims level rose after the holidays, but remained in the same range as we’ve seen since spring 2011:

In the week ending December 29, the advance figure for seasonally adjusted initial claims was 372,000, an increase of 10,000 from the previous week’s revised figure of 362,000. The 4-week moving average was 360,000, an increase of 250 from the previous week’s revised average of 359,750.

The advance seasonally adjusted insured unemployment rate was 2.5 percent for the week ending December 22, unchanged from the prior week’s unrevised rate. The advance number for seasonally adjusted insured unemployment during the week ending December 22 was 3,245,000, an increase of 44,000 from the preceding week’s revised level of 3,201,000. The 4-week moving average was 3,224,250, an increase of 6,500 from the preceding week’s revised average of 3,217,750.

Reporting around the holidays is always tricky, so expect to see some significant adjustments later.  Also, we may see a brief burst in claims two reports from now, as people may wait until after the holidays to file their new claims due to travel.  We probably won’t see a good, reliable level of reporting until mid-January, but nothing so far suggests that we’re moving out of the 360K-380K range of the last 20 months.

What will be tomorrow’s jobs added figure from the BLS?  I’m going to guess 185,000, with an unemployment rate of 7.7%.  Take the poll below:


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…how long before the revision?

KOOLAID2 on January 3, 2013 at 9:44 AM

…negative!

KOOLAID2 on January 3, 2013 at 9:45 AM

Ed- it would be helpful, I think, if someone could put together a chart showing ADP predictions and BLS reporting of monthly job numbers, along with the final reported number after revisions.

And I suspect the layoffs in retail won’t occur until after the return season; or, mid month January.

BKeyser on January 3, 2013 at 9:45 AM

…let’s take government growth out of the stats!

KOOLAID2 on January 3, 2013 at 9:46 AM

What will be tomorrow’s jobs added figure from the BLS?

Whatever the WH needs them to be.

Gatsu on January 3, 2013 at 9:48 AM

Ding ding ding gatsu

cmsinaz on January 3, 2013 at 9:53 AM

do the numbers include california this time?

renalin on January 3, 2013 at 9:53 AM

Reporting around the holidays is always tricky, so expect to see some significant adjustments later. Also, we may see a brief burst in claims two reports from now, as people may wait until after the holidays to file their new claims due to travel. We probably won’t see a good, reliable level of reporting until mid-January, but nothing so far suggests that we’re moving out of the 360K-380K range of the last 20 months.

Related to that, the AP noted that DOL had to estimate data for 9 states this week due to New Year’s-related state office closings.

It also back-handedly explains the 12,000 increase in last week’s initial claims – they had to estimate data from 19 states last week.

Steve Eggleston on January 3, 2013 at 9:54 AM

do the numbers include california this time?

renalin on January 3, 2013 at 9:53 AM

Doubtful – see my previous comment.

Steve Eggleston on January 3, 2013 at 9:55 AM

The only signigicant number in jobs reports from this administration is how many people without jobs are we no longer going to consider “unemployed” this month.

tommyboy on January 3, 2013 at 9:57 AM

The only signigicant number in jobs reports from this administration is how many people without jobs are we no longer going to consider “unemployed” this month.

tommyboy on January 3, 2013 at 9:57 AM

Winner, winner, chicken dinner.

Steve Eggleston on January 3, 2013 at 9:59 AM

How many people are getting off of food stamps?

gwelf on January 3, 2013 at 10:09 AM

It’ll be whatever they want it to be. We have roughly the same number of people in the actual workforce as we did at the bottom of the 2008-09 crisis, plus over 5 million new SSDI recipients who have dropped out of the labor force entirely. So naturally the unemployment rate has been dropping somehow.

JeremiahJohnson on January 3, 2013 at 10:12 AM

Steve Eggleston on January 3, 2013 at 9:55 AM

according to the ap the housing market is improving, though they provide no data to support their contention.
in my town they were giving away unsold xmas trees and the prices of homes is still dropping.

skittles anyone?

renalin on January 3, 2013 at 10:12 AM

How many tens of millions of people are now on what is the never-ending unemployment dole?

CorporatePiggy on January 3, 2013 at 10:12 AM

We just extended unemployment checks for another year..

Whatever the number is…
it ain’t enough…

Electrongod on January 3, 2013 at 10:13 AM

Just crossing the tape

Hugo Chavez had died

The people of Venezuela are free..free at last !!!!

galtg on January 3, 2013 at 10:14 AM

Ed- it would be helpful, I think, if someone could put together a chart showing ADP predictions and BLS reporting of monthly job numbers, along with the final reported number after revisions.
BKeyser on January 3, 2013 at 9:45 AM

Here ya go.
ADP Private Payrolls Spike – Zero Hedge

LoganSix on January 3, 2013 at 10:19 AM

galtg on January 3, 2013 at 10:14 AM

Seeing nothing on that. Got a link?

Steve Eggleston on January 3, 2013 at 10:25 AM

Ok, we gained 215,000 jobs, but lost 362,000 job.

I are not so good at maff, but…

215,000-362,000 seems to indicate -147,000 jobs… Yup… Sounds like were headed in the right direction all right.

SWalker on January 3, 2013 at 10:26 AM

SWalker on January 3, 2013 at 10:26 AM

You’re confusing gross with net. The formula is:

Gross Jobs Gained – Gross Jobs Lost = Net Jobs Gained-or-Lost

The -362K is roughly 1/5th (because there were 5 Saturdays) of the Gross Jobs Lost. The +215K (if ADP can be believed) is the Net Jobs Gained-or-Lost. We can only infer the Gross Jobs Gained because nobody tracks that directly.

Steve Eggleston on January 3, 2013 at 10:37 AM

1 million workers just disappeared off the rolls so they aren’t counted.

It’s ok though because those people didn’t really want jobs anyway, they enjoy scrounging for the basics.

Bishop on January 3, 2013 at 10:40 AM

SWalker on January 3, 2013 at 10:26 AM

You’re confusing gross with net. The formula is:

Gross Jobs Gained – Gross Jobs Lost = Net Jobs Gained-or-Lost

The -362K is roughly 1/5th (because there were 5 Saturdays) of the Gross Jobs Lost. The +215K (if ADP can be believed) is the Net Jobs Gained-or-Lost. We can only infer the Gross Jobs Gained because nobody tracks that directly.

Steve Eggleston on January 3, 2013 at 10:37 AM

No. Four week moving average. Documented losses, 362,000

Estimated gains 215,000 no matter how you slice and dice it, it’s still -147,000 jobs. That remains regardless of the “Estimation” factor, a negative number. Moreover,it also remains 10,000 jobs fewer than are required just to keep up with population growth. Once again, it’s a negative number.

Now, the real question is, during that same period of time, how many people exhausted their unemployment benefits and as a consequence fellow off the unemployment roles artificially reducing the number of people unemployed?

SWalker on January 3, 2013 at 10:57 AM

Whatever the WH needs them to be.

Gatsu on January 3, 2013 at 9:48 AM

..Obama does not need them to be anything. Because he’s locked in for another four years of public-paid-for vacations and rounds of golf, he will let the chips fall where they may.

The War Planner on January 3, 2013 at 10:57 AM

A lot of seasonal hiring in gun stores, I imagine. With 2.8 million background checks, that translated int probably 4 million guns sold. Takes extra staff for that, I imagine. Obama’s ‘stimulus’ in this one industry has worked like gangbusters!

michaelo on January 3, 2013 at 11:00 AM

1 million workers just disappeared off the rolls so they aren’t counted.

It’s ok though because those people didn’t really want jobs anyway, they enjoy scrounging for the basics.

Bishop on January 3, 2013 at 10:40 AM

Heh. Do you suppose illegal aliens are counted?

ShainS on January 3, 2013 at 11:04 AM

Whoa, Fiona has really let herself go.

Positive thoughts for the people of Venezuela. If the rumor is true, may their next dictator leader be more benevolent.

Fallon on January 3, 2013 at 11:06 AM

Ed:

With all due respect , Sir, I suggest that you review this.

December private jobs number surge to 215K on expectations of a 140K print. The primary reason for the spike, a +39K surge in construction jobs, supposedly in the aftermath of Sandy, as well as some +53 job additions in trade, transportation and utilities. Also, how ADP gets +14K financial jobs in the peak financial layoffs month (to avoid year end bonuses of course), is anyone’s guess. And while we should worry about that unemployment rate rapidly approaching the 6.5% Bernanke QE4EVA threshold end (don’t worry, tomorrow we will find that the labor participation rate mysteriously has started to grow again to actually push the unemployment rate higher now that the Obama re-election is no longer an issue), we definitely should not worry about America’s manufacturing renaissance, as the country lost yet another 11,000 manufacturing jobs ~ the 6th month in a row with mfg job declines and Ohio got fu*ked.

DevilsPrinciple on January 3, 2013 at 11:27 AM

How many people are getting off of food stamps?

gwelf on January 3, 2013 at 10:09 AM

and…how many people are going on disability?

Dr. ZhivBlago on January 3, 2013 at 12:05 PM

No. Four week moving average. Documented losses, 362,000

Estimated gains 215,000 no matter how you slice and dice it, it’s still -147,000 jobs. That remains regardless of the “Estimation” factor, a negative number. Moreover,it also remains 10,000 jobs fewer than are required just to keep up with population growth. Once again, it’s a negative number.

Now, the real question is, during that same period of time, how many people exhausted their unemployment benefits and as a consequence fellow off the unemployment roles artificially reducing the number of people unemployed?

SWalker on January 3, 2013 at 10:57 AM

I’ll try this again:

- The weekly initial jobless claims merely measures how many people that week filed for unemployment. It does not count how many people who were not working the prior week found jobs because, thankfully, most people don’t work for government, and government doesn’t require weekly reporting from the private-sector workforce.

- The monthly ADP and BLS jobs reports survey how many people are
working in the second full week of each month, and the difference between that number and the prior month’s number is an estimate of how many jobs were created or lost. It does not directly count how many people lost jobs or found jobs from the prior month.

- The ADP/BLS jobs created/lost estimate is the difference between the number of people who found jobs and the number of people who lost jobs.

Even though the proper 4-week average was the one from 3 weeks ago, and the ADP estimate is usually too high, let’s review the math with the numbers we have.

4-week average jobs found – 4-week average jobs lost = Monthly jobs gained/lost
4-week average jobs found – 362,000 jobs lost/week = 215,000 jobs created between Nov. and Dec.

Steve Eggleston on January 3, 2013 at 12:09 PM

Whatever the WH needs them to be.

Gatsu on January 3, 2013 at 9:48 AM

This.

dogsoldier on January 3, 2013 at 12:36 PM

DevilsPrinciple on January 3, 2013 at 11:27 AM

Link and attribution? I’d like to read that.

dogsoldier on January 3, 2013 at 12:38 PM

RSC and Boehner kiss and make up – Jim Jordan votes for Boehner.

Steve Eggleston on January 3, 2013 at 12:57 PM

Steve Eggleston on January 3, 2013 at 10:25 AM

no Steve..no link..it came over a squawk box..posted it the minute i heard it..sorry..still no confirmation

galtg on January 3, 2013 at 1:06 PM

4th D defection from Pelosi – Mike McIntyre speaks-in Jim Cooper.

Steve Eggleston on January 3, 2013 at 1:10 PM

Steve Eggleston on January 3, 2013 at 10:25 AM

This just came over the dj wire:

DJ UPDATE: More Venezuelan Officials Arrive in Cuba; Chavez’s Condition `Delicate`

CARACAS–More top leaders within Venezuela’s government arrived in Cuba
during the past two days, where ailing President Hugo Chavez apparently remains
in “delicate” condition after a six-hour surgery, raising concerns once again
that the 58-year-old leader is either at death’s door or has already passed
away.

somethings happenning

galtg on January 3, 2013 at 1:17 PM

There will be a lot of waiters and waitresses with college degrees serving you. So, at least your orders should be correct on the first try over the next four years.

Rockshine on January 3, 2013 at 1:50 PM

galtg on January 3, 2013 at 1:17 PM

Thanks. Double-checked with Fausta earlier, and she said there probably won’t be anything officially announced until the 10th, when Chavez is supposed to be sworn in again.

Steve Eggleston on January 3, 2013 at 2:44 PM

Venezuelans demand answers

Schadenfreude on January 3, 2013 at 3:50 PM

So is it better for the economy to have 100k people working full-time or 150k working part-time? And if full-time is now defined as 30+ hours /week, all it’s going to do is show more people working (improving unemployment rates) but the average income rates still falling, or?

AH_C on January 3, 2013 at 5:56 PM