January 2019 ADP Job Growth Is 213,000

ADP reported non-farm private jobs growth at 213,000 which was well above the range of expectations..

Analyst Opinion of ADP Employment Situation

This month the rate of ADPs private employment year-over-year growth is 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 downward.

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

  • The market expected from Econoday 150,000 to 175,000 (consensus 167,000). These numbers are all seasonally adjusted.
  • In Econintersect's January 2019 economic forecast released in late December, we estimated non-farm private payroll growth at 190,000 (based on economic potential) and 180,000 (fudged based on current overrun / under-run of economic potential).
  • This month, ADP's analysis is that small and medium sized business created 69 % of all jobs
  • Manufacturing jobs grew 33,000.
  • 68 % of the jobs growth came from the service sector.
  • The December ADP report (last month), which reported job gains of 271,000 was revised to 263,000
  • The three month rolling average of year-over-year job growth rate is 2.0 % (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 job market weathered the government shutdown well. Despite the severe disruptions, businesses continued to add aggressively to their payrolls. As long as businesses hire strongly the economic expansion will continue on.

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

The labor market has continued its pattern of strong growth with little sign of a slowdown in sight. We saw significant growth in nearly all industries, with manufacturing adding the most jobs in more than four years. Midsized businesses continue to lead job creation, however the share of jobs was spread a bit more evenly across all company sizes this month."

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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