February 2019 ADP Job Growth Is 183,000

ADP reported non-farm private jobs growth at 183,000 which was within the range of expectations.

Analyst Opinion of ADP Employment Situation

This month the rate of ADPs private employment year-over-year growth remains on the high side of the tight range seen over this year - and remains on an improving employment growth trend line. Last month's employment numbers were revised upward.

ADP employment has not been a good predictor of BLS non-farm private job growth.

  • The market expected from Econoday 166,000 to 220,000 (consensus 180,000). These numbers are all seasonally adjusted.
  • In Econintersect's February 2019 economic forecast released in late January, we estimated non-farm private payroll growth at 190,000 (based on economic potential) and 210,000 (fudged based on current overrun / under-run of economic potential).
  • This month, ADP's analysis is that small and medium sized business created 58 % of all jobs [an unusually low number]
  • Manufacturing jobs grew 17,000.
  • 76 % of the jobs growth came from the service sector.
  • The January ADP report (last month), which reported job gains of 213,000 was revised to 300,000
  • The three month rolling average of year-over-year job growth rate is 2.1 % (same as last month)

ADP changed their methodology starting with their October 2012 report, and ADP's real time estimates are currently worse than the BLS.

Per Mark Zandi, chief economist of Moody's Analytics:

The economy has throttled back and so too has job growth. The job slowdown is clearest in the retail and travel industries, and at smaller companies. Job gains are still strong, but they have likely seen their high watermark for this expansion.

Per Ahu Yildirmaz, VP and head of the ADP Research Institute.

We saw a modest slowdown in job growth this month. Midsized companies have been the strongest performer for the past year. There was a sharp decline in small business growth as these firms continue to struggle with offering competitive wages and benefits.

Jobs growth of 150,000 or more is calculated by Econintersect to the minimum jobs growth to support population growth (see caveats below). The graph below shows ADP employment gains by month.

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