November 2018 ADP Job Growth Is 179,000

ADP reported non-farm private jobs growth at 179,000 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 is on the high side of the tight range seen over this year. Last month's employment numbers were revised marginally downward.

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

  • The market expected from Econoday 161,000 to 195,000 (consensus 175,000). These numbers are all seasonally adjusted.
  • In Econintersect's November 2018 economic forecast released in late October, we estimated non-farm private payroll growth at 220,000 (based on economic potential) and 200,000 (fudged based on current overrun / under-run of economic potential).
  • This month, ADP's analysis is that small and medium sized business created 92 % of all jobs [historically a high percentage].
  • Manufacturing jobs grew 4,000.
  • 91 % of the jobs growth came from the service sector.
  • The October ADP report (last month), which reported job gains of 227,000 was revised to 225,000
  • 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:

Job growth is strong, but has likely peaked. This month's report is free of significant weather effects and suggests slowing underlying job creation. With very tight labor markets, and record unfilled positions, businesses will have an increasingly tough time adding to payrolls.

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

"Although the labor market performed well, job growth decelerated slightly. Midsized businesses added nearly 70 percent of all jobs this month. This growth points to the midsized businesses' ability to provide stronger wages and benefits. It also suggests they could be more insulated from the global challenges large enterprises face.

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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