ADP Report of 206,000 New Jobs Buoys Hopes for Friday’s Official Count

Payroll and HR services firm ADP spread around a little holiday cheer this morning when the company said 206,000 new jobs were added to private payrolls this month.

It came as a surprise to economists who had predicted a more modest increase of about 130,000, according to a survey by Dow Jones Newswires. In addition, ADP revised its October private-sector growth number by 20,000 to 130,000.

The ADP report sparked a stock rally that ignited after it became known that the U.S. Federal Reserve and other central banks were coordinating efforts to help Europe’s debt crisis. The Dow rose more than 400 points, settling at just under that after lunch in New York.

While the numbers don’t often sync well with the official numbers from the U.S. Department of Labor, ADP’s National Employment Report offers guidance about the monthly government report. That report is due out Friday morning. Before today’s ADP report, estimates of what the Labor Department would show ranged from around 100,000 to 130,000. After the release, Reuters reported Deutsche Bank raised its forecast  to 150,000, while Capital Economics adjusted its 1000,000 estimate to 140,000.

The Reuters report also noted the long-running debate among economists over the validity of the various jobs numbers. ADP and its partner in the national report Macroeconomic Advisers produce its job growth estimates from ADP’s payroll processing data. The company handles the payroll for more than 500,000 business clients in the U.S. The official report, produced by the U.S. Bureau of Labor Statistics, is derived from a survey of payroll data from some 140,000 businesses and governments.

The ADP report says most of November’s job growth was in the service sector, which added 178,000 positions. Businesses with fewer than 50 employees accounted for 95,000 of those jobs. Businesses from 50-499 workers added 67,000 service jobs.

The goods-producing sector added 28,000 workers. All the gain came from employers with fewer than 500 workers. The biggest employers, those with 500 and more employees, dropped 4,000 jobs during the month.

Tempering the strong jobs growth news from ADP is a Conference Board report showing a sixth consecutive month of fewer jobs being advertised online. The Conference Board’s Help Wanted OnLine survey said 76,200 fewer jobs were posted online in November than in October.

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“The November decline in labor demand, following on the heels of the drops for the previous five months, is not good news for the labor market,” said June Shelp, vice president at The Conference Board.

During the month 3,857,200 jobs were listed online, according to the data compiled by Wanted Technologies.

Also released this morning was the monthly layoff report from global outplacement firm Challenger, Gray & Christmas. The firm said U.S. employers announced job cuts totaling 42,474, down 0.7 percent from 42,759 in October. Announced layoffs so far this year are ahead of the total for all of 2010, the firm said. Including the November number, the total this year is 564,297. The total for 2010 was 529,973.

Most of the layoffs this year have come from government, the Challenger report says. Some 180,000 layoffs were announced there. The financial sector was a distant second with 56,000 announced layoffs.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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5 Comments on “ADP Report of 206,000 New Jobs Buoys Hopes for Friday’s Official Count

  1. Unbelievable…Halfway through this article, I was sure it was written for comic relief. How many contradictory studies can you feed to the American public and expect them to believe any of them?

    One of my favorites was that the ADP report sparked a surge in the stock market…even though their numbers don’t often sync with the official DOL numbers. HA!!! And even more hilarious, Deutsche Bank and Capital Economics decided to quickly adjust their own [factual?] numbers to be more in line with this new report.

    Exactly a year ago, in doing research for my book “from Bedlam to Boardroom… How to get an executive career back on track!” I spent weeks sifting through BLS and DOL and mortgage industry data and online economy sites to come up with correct numbers of unemployment and jobs. It was nearly impossible to sync data from any 3 sources.

    Direct phone calls to the economists inside these organizations were an exercise in disillusionment… with several hemming and hawing about the reasons they couldn’t get good data in this “rapidly changing economy.”

    And a year later, it’s obviously the same story…

    This article points out one more example of experts distributing conflicting data that is unusable for research or decision-making.

    On the other hand, I did enjoy the comic relief.

  2. @ Colleen:
    These might clarify matters-
    The lowest UER estimate (WSJ 11/2011) shows 7.5% by the end of 2014.

    Keith sez:
    “The Great Recession for unemployment is over when there are 3 straight months of 7.0% or lower unemployment.”
    Any guesses when that’ll be?

    KH
    ………………………………………………….
    Recent Economic Forecasts: Last Updated: 2011.11.28 (http://myweb.rollins.edu/wseyfried/forecast.htm)

    OECD Economic Outlook (Nov 2011): economic growth = 2% in 2012, 2.5% in 2013; inflation = 1.9% in 2012, 1.4% in 2013; unemployment rate = 9.9% by end of 2012, 8.4% by end of 2013; budget deficit = 9.3% of GDP in 2012, 8.3% of GDP in 2013

    NABE September survey (Nov 21-CNBC): economic growth = 2.4% in 2012; unemployment rate = 8.7% at end of 2012, inflation = 2% in 2012, interest on 10-year T-bond = 2.7% by Dec 2012

    Wells Fargo Securities Economic Forecast (latest monthly forecast, Nov 2011: latest forecast, Nov 18-latest weekly analysis): economic growth = 2.6% in Q4, 1.7% in 2012Q1; 2% in 2012 and 1.8% in 2013; core PCE inflation = 1.5% in 2011, 1.6% in 2012 and 1.6% in 2013; CPI inflation = 3.2% in 2011, 2% in 2012 and 2% in 2013; unemployment rate rises to 9.4% in 2012Q2, 9.4% by end of 2012 and 9% by the end of 2013

    Univ. of Michigan Economic Forecast (executive summary – Nov 17, 2011): economic growth = 2.5% in 2012 and 2.5% in 2013; core inflation (CPI) = 1.7% in 2012 (overall inflation = 2.2%) and 1.6% in 2013; unemployment rate rises to 9.2% by early 2012, averaging 8.9% for all of 2012 before declining to 8.5% by end of 2013

    Survey of Professional Forecasters (latest survey Nov 2011): economic growth=2.6% in Q4, 2.4% in 2012Q1; 2.4% in 2012, 2.7% in 2013, 3.5% in 2014; core inflation (PCE)=1.6% in 2012 and 1.8% in 2013 (overall PCE inflation=1.9% in 2012, 2.2% in 2013); unemployment rate=9% in 2011Q4, 8.7% in 2012Q4; average unemployment rate = 8.4% in 2013, 7.8% in 2014

    Economic forecasting survey, Nov 2011 (WSJ): economic growth = 2.5% in Q4, 2% in 2012Q1, 2.3% in 2012, 2.6% in 2013, 3% in 2014; unemployment at 9% at end of 2011, 8.7% at end of 2012, 8.1% at end of 2013, 7.5% at end of 2014; inflation = 2.2% in 2012, 2.3% in 2013; Fed begins raising interest rates in second half of 2013; 25% chance of recession in US in 2012, 66% in Eurozone

    Fed Forecast as of November 2011: economic growth = 1.6-1.7%% in 2011, 2.5-2.9% in 2012, 3%-3.5% in 2013; long-run economic growth = 2.5-2.8% (note: these are from 4th quarter to 4th quarter); unemployment rate = 9-9.1% in 2011, 8.5-8.7% in 2012 and 7.8-8.2% in 2013 (estimates are for 4th quarter of the respective year); natural rate of unemployment = 5.2 to 6%; inflation as measured by core PCE index of 1.8 to 1.9% in 2011, 1.5 to 2% in 2012 and 1.4-1.9% in 2013

    Quarterly economic survey (USA Today – Oct 31, 2011): economic growth = 2.4% in 2012; unemployment rate little changed over the next year

    CNN-Money (October 24, 2011): economic growth = 2.5% in Q3, 2.2% in Q4, 2.3% in 2012

    IMF (September; see p75/pdf page 5): US economic growth = 1.5% in 2011, 1.8% in 2012; unemployment rate averages 9.1% in 2011, 9% in 2012; inflation = 3% in 2011, 1.2% in 2012

    CBO (September update; for Aug forecast, click here): economic growth = 1.5% in 2011, 2.5% in 2012; unemployment close to 9% thru end of 2012; from Aug forecast – core PCE inflation = 1.3% in 2011 and 1.4% in 2012; growth in potential GDP = 2.3% from 2011-2016 and 2.4% from 2017-2021; natural rate of unemployment = 5.2 to 5.3% (don’t reach that rate until 2016)

    Bloomberg (Sep 2011): economic growth = 1.6% in 2011, 2.2% in 2012

    OMB (Sep 2011 – see pdf page13-14): The OMB includes 2 sets of forecasts – one was its original midterm review forecast made in June, the other is an alternative forecast reflecting information available through late August (alternative forecast is on pages 13-14; June forecast is on page 9) economic growth (4th quarter 2010 to 4th quarter 2011) = 1.6% in 2011, 2.9% in 2012, 3.8% in 2013 and 4% in 2014; unemployment averages 9.1% in 2011, 9% in 2012; end of year based on June forecast = 8.6% in 2011, 8.2% in 2012; inflation = 2.8% in 2011, 1.9% in 2012; natural rate of unemployment = 5.2%, growth in potential GDP = 2.5% (economy returns to potential at the end of 2017); see pdf page 12 for comparison with other forecasts

    Survey of Primary Dealers (Reuters/CNBC): economic growth = 1.8% in 2011; unemployment = 8.9% at end of 2011, 8.5% at end of 2012

    Livingston Survey (latest survey – June 2011): economic growth = 2.2% in first half of 2011 and 3.2% in second half of 2011, 3% in first half of 2012; unemployment rate = 8.9% in June 2011 and 8.6% in Dec 2011, 8.3% in June 2012; inflation (CPI) = 3.1% for 2011 and 2.2% for 2012; long-term economic growth = 2.7%, inflation averages 2.4% over the next decade

  3. @ BKJ; Well said. Whose election- President “Republican Candidate Whose Campaign Hasn’t Imploded in the Next 3 Months’s” Re-election Bid in 2016?

    Cheers,
    Keith

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