March 7, 2018

February 2018 ADP Employment Report: 235K Private-Sector Jobs Added (232K/Mo. In Past 4 Months); ADP Downwardly Revises Prior 13 Months by 285K

Filed under: Economy,Taxes & Government — Tom @ 8:34 am

BIGGEST TAKEAWAY: ADP revised Jan. 2017 through Jan. 2018 down by a net total of 285,000 jobs, bringing its reported job additions over the past 13 months down closer to figures reported by the government’s Bureau of Labor Statistics. This leads one to believe that ADP’s figures for more recent months might still be somewhat overstated.


The main page showing 235,000 jobs added in February is here.

There press release is here:

“The labor market continues to experience uninterrupted growth,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “We see persistent gains across most industries with leisure and hospitality and retail leading the way as consumer spending kicked up. At this pace of job growth employers will soon become hard-pressed to find qualified workers.”

Mark Zandi, chief economist of Moody’s Analytics, said, “The job market is red hot and threatens to overheat. With government spending increases and tax cuts, growth is set to accelerate.”

Revisions to prior data:

  • January 2018: Was +234K, now 244K
  • December 2017: Originally 250K, now 249K
  • November 2017: Originally 190K, now 200K

ADP vs. BLS UPDATE: ADP has reduced previously reported figures going back to January 2017 by 285,000, bridging more than half of the previously reported distance between the two entities’ reported jobs additions.

In the past 14 months, ADP shows 2.727 million private-sector jobs added. In February, ADP reduced previously reported jobs added during the previous 13 months by 285,000 jobs.

Here’s this month’s graph vs. last month’s, showing pretty dramatic drops in several previous months (click to enlarge in a separate window or tab):


Almost all of the net writedown, totaling 258K, is in March (-133K), August (-58K), and October (-77K).

In the 13 months ended January 2018, BLS shows 2.351 million private-sector jobs added.

Pending Friday’s report, the BLS is now only 376K below ADP. If private-sector job adds come in at 230K on Friday, which is slightly below Mark Zandi’s overall expectation including the government sector, BLS will be lower than ADP by 141K, an average of only 10K per month over 14 months.



Very strong report, well north of 200K.

Job gains very broad-based across all industries, including a fair amount of jobs added on the goods side of the economy.

Also good across all company sizes, and across the country.

Job growth should remain strong because of tax cuts and government spending increases. Spring and summer especially. Govt. spending will support second-half and early 2019 job growth. Should be very strong going forward.

Job growth is still outpacing 100K/month of stable labor force growth. Unemployment and under-employment are destined to come down, even to the low-3s by Spring-Summer 2019.

Risk of overheating is rising. Wage pressures are developing. Interest rates will go up too.

Commenting on trade and tariffs. If the tariff increases are comparable to what Trump and Commerce Dept. want, that by itself without a response would have a small impact, and job increases would be small (10K-15K), but other consuming industries would lose jobs to the tune of 50K-60K. So net losses. But if trading partners respond, the losses could increase and get into the hundreds of thousands in a full-scale trade war.


ME (BLS and age of new jobs): He expects 235K. ISM surveys are healthy. Consumer confidence and small biz confidence are very high, esp Conference Board.

As to age, millennials are doing very, very well, experiencing robust wage gains, consistent with the narrative that they came into the workforce during the recession, took low-paying, not good-fit jobs, but now they’re jumping to higher-paying and better-fit jobs, esp over the past year.

As to age, Boomers have low wage growth, partially because their wages were already high.

Aging and productivity report is showing that Boomers have contributed to the slowdown in productivity growth (hmm)

CHRIS RUGABER, AP (ability of people to find the employees they need, and flat productivity): Strong job market is pulling people in (I thought this wasn’t supposed to be significant. — Ed.) But there will still not be enough workforce growth to support 200K job adds indefinitely. Some businesses will find themselves unable to fill positions because they can’t find the people they need.

On productivity, Zandi anticipates that businesses will invest more to make existing employees more productive. Possible surges long-term due to AI and robotics.

STEVE LEVINE, AXIOS (?) (base case for trade and retaliation from abroad in terms of scale of response, also what is low-3s for 2019 joblessness) — Gary Cohn’s departure from Trump is over tariffs, odds of broad-based tariffs have risen. Anticipates a proportional response from trading partners (Canada and Europe). But it could work out positively and tariffs will be more targeted instead of broad-based (but NAFTA is part of the discussion. Full-blown trade war is remotely possible and can’t be ruled out.

Also the trade issue is injecting business uncertainty into the equation.

Unemployment rate will be at 3.0-3.5 percent by end of 2019, possibly as low as high-2s if Fed continues down its current path. This is due to a lot of fiscal stimulus between tax cuts and spending increases.

LAURENCE ???, Christian Science Monitor: A job-loss trade-related answer if proportional response, and business-size impact. Zandi would guess 100K-150K in U.S. job losses, and it would be broad-based across company sizes, but large companies might be in a better chance to absorb without jobs losses.



  1. Related:

    US Steel Restarts Two Blast Furnaces in Granite City, IL After Trump Announcement on Tariffs

    On Tuesday Jesse Gary, the Executive Vice President at Century Aluminum, told Trish Regan on FOX Business Network that Century Aluminum will hire 300 new employees in western Kentucky thanks to Donald Trump’s announcement on tariffs this past week.

    Now this…
    US Steel will restart two blast furnaces and recall 500 employees in Granite City, Illinois following President Trump’s decision to tax steel and aluminum imports.
    A total of 800 new US steel and aluminum jobs were announced in the last two days.

    That would be 800 people no longer drawing government benefits…at the taxpayers expense. And…that also lowers the budget outlays for FY2018. And…lowers the annual deficit.

    Comment by dscott — March 7, 2018 @ 4:52 pm

  2. [...] for Wiseman, I attended Wednesday’s ADP Employment Report conference call. My notes on what Zandi said on the call do not reflect the AP reporter’s soundbite portrayal: (He) anticipates a [...]

    Pingback by BizzyBlog — March 11, 2018 @ 9:03 pm

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