September 4, 2014

ADP August Private-Sector Jobs: +204K (See Conference Call Notes)

Filed under: Economy — Tom @ 8:29 am

Link is here.

Press release:

ROSELAND, N.J. – September 4, 2014 – Private sector employment increased by 204,000 jobs from July to August according to the August ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) 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.

August 2014 Report Highlights*
Total U.S. Nonfarm Private Employment: 204,000 (jobs added)

… Mark Zandi, chief economist of Moody’s Analytics, said, “Steady as she goes in the job market. Businesses continue to hire at a solid pace. Job gains are broad based across industries and company sizes. At the current pace of job growth the economy will return to full employment by the end of 2016.”

2-1/2 years from now, we’ll hit “full employment.” Wow. How impressive. (/sarc)

July was slightly reduced to +212K from +218K.

CONFERENCE CALL NOTES:

MARK ZANDI: August was a solid number, anything over 200K per month is good, actually very good.

Full employment by end of 2016, even under the assumption of normalized labor force growth.

Broad-based job growth, except the information industry, and across company size, including company size. Small companies kicking into gear.

It’s evidennt that we’re getting job growth across pay scales, even middle-paying jobs.

Job growth is remarkably stable, vs. prior eras of boom-bust. A year ago, it was tracking 175K per month, now his sense is that underlying job growth is 225K per month, with very modest variability. “Remarkable stability.” GDP growth has also been stable (with negative 1Q11 and 1Q14. Really? — Ed.)

We’re in a 3% growth situation. Vehicle sales, etc. Brighter hue to econ data in general. Just generally speaking, it feels like we’re in a whole new trajectory of growth. Still a long way to go.

Decade to get back to full employment. A lot of progress.

QUESTION5.

(ME — What is full employment>
5.5%, rate consistent with absorbing LT unemployed and part-timers wanting FT.

Last decade, full emp was 5%, we were beyond that level in 2006 and 2007.

The full-emp definition is higher because of daamage created by recession. .5% added to structural unemployment because of it.

(Chris R – AP) Why isn’t consumer spending increasing?

Zandi doesn’t know. Confidence is high, jobs growth is better and with better-$ jobs.

It is showing up in vehicle sales.

Expects consumer spending to pick up, and he’s not sure he trusts the data. He thinks decline in health care spending makes no sense in light of Obamacare’s existence. (what about high deductibles, Mark?) They’re going to start using their new insurance. Gut says spending figures will be revised up. “I’m not sure I believe it.” When it gets revised up, the other data pieces will fit together.

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4 Comments

  1. Isn’t it interesting how “full employment” has shifted up by 10% (or 0.5 percentage points) now that a Democrat is in the Oval Office.

    As for “stability”, Generalissimo Francisco Franco’s condition has been “stable” for almost as long as I’ve been around. Something tells me that the economy is in that same boat.

    Comment by steveegg — September 4, 2014 @ 9:18 am

  2. Great points. Amazing how they lower the bar. I don’t even think anyone even acknowledged we were in in full emp in 2006-2007, or if they did, they thought it was 4%.

    Comment by Tom — September 4, 2014 @ 9:51 am

  3. [...] ADP Private-Sector Payrolls — 204,000 jobs [...]

    Pingback by BizzyBlog — September 5, 2014 @ 8:29 am

  4. [...] to Moody’s economist Mark Zandi’s contention in the ADP jobs report conference call on Thursday, September 4 that “full employment” should now be defined as 5.5 percent unemployment. [...]

    Pingback by BizzyBlog — September 10, 2014 @ 12:17 pm

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