September 5, 2013

ADP Private Sector Jobs (+176K); Initial Unemployment Claims (323K SA; NSA Claims Down 13% From Same Week Last Year); See ADP Conference Call Notes

Filed under: Economy,Taxes & Government — Tom @ 8:14 am

Predictions (both per Business Insider):

  • ADP — 177,000 private sector jobs added.
  • Initial unemployment claims — a seasonally adjusted 330,000.

ADP will be here at 8:15. Initial claims will be here at 8:30.

I’m going to be on ADP’s conference call starting at 8:45, and will take live notes.

________________________________________

ADP (permanent link):

Private-sector employment increased by 176,000 from July to August, on a seasonally adjusted basis.

Highlights:
- Small businesses (1-49 employees) +71,000
- Medium businesses (50-499 employees) +74,000
- Large businesses (500 or more employees) +32,000

July was revised up to 198,000.

From the press release:

“The U.S. private sector added 176,000 jobs in August, as companies of all sizes expanded their payrolls over the previous month,” said Carlos A. Rodriguez, president and chief executive officer of ADP. “The August job gains are in line with the monthly average over the last 12 months.”

Mark Zandi, chief economist of Moody’s Analytics, said, “It is steady as she goes in the job market. Job gains in August were consistent with increases experienced over the past two-plus years. There is little evidence that fiscal austerity and Health Care Reform have had a significant impact on the job market.”

Really, Mark?

_____________________________

Initial claims (permanent link):

SEASONALLY ADJUSTED DATA

In the week ending August 31, the advance figure for seasonally adjusted initial claims was 323,000, a decrease of 9,000 from the previous week’s revised figure of 332,000. The 4-week moving average was 328,500, a decrease of 3,000 from the previous week’s revised average of 331,500.

… UNADJUSTED DATA

The advance number of actual initial claims under state programs, unadjusted, totaled 268,843 in the week ending August 31, a decrease of 9,781 from the previous week. There were 309,537 initial claims in the comparable week in 2012.

The year-to-year seasonal adjustment factors barely differed.

Initial claims of 325,000 per week isn’t too bad; getting closer to substantive job gains and lower unemployment.

_______________________________

ADP Conference Call:

(Zandi’s Comments)

Numbers were consistent with kind of job growth we’ve been getting in past months and years. Remarkably consistent.

Job gains registered in every major industry. First time in a long time.

Job gains across all company sizes. Small guys are starting to kick in, which wasn’t happening a few years ago.

Says he would have expected more of a slowdown b/c of sequester and health care reform, but it’s not happening. Job creation consistent even at the 50-employee Obamacare threshold. So job market has held up better.

It is possible that the script is still being played out.

Next round of sequester cuts might be more harmful.

Reasonable to argue that market would be stronger if not for sequester and health care reform.

All together, encouraging that job market has weathered storm as well as it has.

Still hasn’t kicked into high gear, but getting closer.

(Q&A)

(ME — on Full-time/Part-time trends) — BLS data is very volatile. Hard to conclude that there’s a trend in the data. Much too early to conclude. (He said he’s NOT able to get PT/FT info from ADP data, which is surprising and really disappointing. I think it’s in there at a sophisticated, data-driven company like ADP, and he’s just not receiving it. One wonders if he’s even interested.) Overall PT/FT workforce mix hasn’t changed that much.

(Next Q on Fed taper) — Taper won’t begin until Oct. If ADP is “ratified” tomorrow, odds are very high that they’ll begin to taper, but very modestly to maybe $70-70 bil instead of current $85 bil. Yields have raised to a level higher than he expected. Stock market seems to be holding firm, suggesting that runup in interest rates has a lot to do with a better economy.

Those were the only questions.

As to Zandi’s answer to my question: I guess getting hit over the head with a 2×4 (77% PT vs. 23% FT job adds so far this year, the statement within which I framed my question) isn’t enough. I guess next month we’ll get out the 4×6 and see what happens. The kind of change he thinks he needs to see in the FT/PT mix is way higher than the regular observer needs to say that something unusual is going on in the job market, and Obamacare’s 30-hour full-time definition is the obvious prime suspect.

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5 Comments

  1. Anybody want to bet on a negative September number being reported next month? After all, what the non-shutdown of auto plants gave July and August in the form of an artifical boost will be taken away in September in the form of an artificial drop.

    That conference call should be “interesting” considering the service sector accounted for almost all of the job growth.

    Comment by steveegg — September 5, 2013 @ 8:20 am

  2. Zandi’s “all is well” statement is straight out of Animal House.

    Comment by Tom — September 5, 2013 @ 8:27 am

  3. That PT/FT mix is not job adds, but net changes in the hours worked. It would be one thing if employees were working two part-time jobs to make up for losing one full-time job, but they’re increasingly accepting the fact they’re not going to work “full-time” anytime soon.

    Comment by steveegg — September 5, 2013 @ 9:27 am

  4. [...] ADP Private Sector Payrolls — 176,000 jobs added in August. [...]

    Pingback by BizzyBlog — September 6, 2013 @ 8:24 am

  5. [...] conference call after the ADP employment report was issued, Mark Zandi of Moody’s Analytics claimed that “the BLS data is very volatile” (do I hear an echo?), and that it’s [...]

    Pingback by BizzyBlog — September 7, 2013 @ 6:44 pm

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