January 05, 2011
— Geoff ADP released its employment report for December, showing an increase of 297,000 jobs from November. From their press release:
...employment seems to have accelerated as indicated by SeptemberÂ’s employment gain of 29,000, OctoberÂ’s gain of 79,000, NovemberÂ’s gain of 92,000 and DecemberÂ’s gain of 297,000. Strength was also evident within all major industries and every size business tracked in the ADP Report.While most of the gains came from the service sector (rather than manufacturing, dang it), it's worth noting that construction employment did not drop for the first time since June 2007.
I'm sure you're all desperate to see the employment data in graphical form, so here you go:
That little uptick on the right is dwarfed by the jobs lost, but it shows that the business sector has been showing some real signs of life for the last half-year. We're still looking at a very weak financial sector, and we're facing another 10 - 20% drop in real estate prices this year, but the business sector is acting like it finally sees a path forward. And as I've been pointing out for the last couple of months, those signs of life started appearing once the election polls showed that the GOP would take control of the House.
Tomorrow we'll see this week's initial unemployment claims data, which has been falling reasonably steadily for 6 months, and on Friday the unemployment rate for December comes out.
Posted by: Geoff at
06:44 AM
| Comments (81)
Post contains 248 words, total size 2 kb.
Posted by: joncelli at January 05, 2011 06:47 AM (RD7QR)
Posted by: Ella at January 05, 2011 06:49 AM (mROFd)
So how many of those service jobs were seasonal and will be gone in Jan/Feb? 270,000 of the jobs were service related.
Who knows? But the data is seasonally adjusted, and while it may be a bit high, it does follow the trend for the last 6 months.
Posted by: geoff at January 05, 2011 06:49 AM (mMh1M)
One said:
"For 1.1 million jobs created in 2010 alone, more than the entire 8 years of Bush"
Where the Hell do these people live? Mars?
Posted by: SurferDoc at January 05, 2011 06:50 AM (o3bYL)
And sweet merciful crap, does that graph include all the Census jobs that are going away?
Those were almost all gone as of last August.
Posted by: geoff at January 05, 2011 06:50 AM (mMh1M)
Posted by: Buster Hymand at January 05, 2011 06:50 AM (SZy+Y)
Robert Gibbs just resigned. Oh no!
Keith Olbermann for Press Secretary!!! Please!!!
Or maybe Chrissy Tinglepants Matthews!!!
Posted by: Kortezzi at January 05, 2011 06:50 AM (piR98)
My thoughts exactly. I don't see any increase in real business.
Posted by: Vic at January 05, 2011 06:51 AM (M9Ie6)
Posted by: izoneguy at January 05, 2011 06:51 AM (83mM1)
Posted by: Mary Cloggonstien from Brattleboro, VT at January 05, 2011 06:52 AM (SZy+Y)
How much of this can be tied to the extension of the Bush tax cuts?
My thesis is that once it looked like the House was going to be run by the GOP, business knew that: 1) they were finally going to get a decision on the tax cuts, and 2) the GOP would fight for extension for everybody. The tax cuts aren't the entire picture, but they're an important component.
Posted by: geoff at January 05, 2011 06:53 AM (mMh1M)
Posted by: ParisParamus at January 05, 2011 06:53 AM (/ztJQ)
Slightly Off Topic, though: On the way in to work this morning, I heard the ABC Financial lady bemoaning the fact that (rough quote) "The strong dollar is punishing commodities and oil."
I thought to myself: "So the strong dollar is now a bad thing? And high oil prices are good? (They're being "punished," you see) Oh, to have recorded audio of your take on those two ideas when George Bush was president, because I remember your opinion being the reverse then of what it is now"
Posted by: AllenG (Dedicated Tenther) at January 05, 2011 06:54 AM (8y9MW)
It's been a long two years. Hope things continue to go well.
Posted by: Jane D'oh at January 05, 2011 06:54 AM (UOM48)
Posted by: learflyer at January 05, 2011 06:55 AM (9vscO)
Posted by: ef at January 05, 2011 06:56 AM (c7Pp2)
Posted by: Illinidiva at January 05, 2011 06:56 AM (9ubSc)
Posted by: Navy Guy at January 05, 2011 06:56 AM (dOOBu)
Posted by: joncelli at January 05, 2011 06:57 AM (RD7QR)
Posted by: Jimmuy at January 05, 2011 06:57 AM (4xsjL)
I'm willing to bet a good percentage of them are, indeed, seasonal (probably go back to school later this month).
Hey, Geoff, do you have the job creation stats per state? I'd love to see what percentage of these went up in which states.
Posted by: AllenG (Dedicated Tenther) at January 05, 2011 06:57 AM (8y9MW)
Posted by: nickless at January 05, 2011 06:58 AM (MMC8r)
Hey, Geoff, do you have the job creation stats per state? I'd love to see what percentage of these went up in which states.
ADP doesn't provide that info. BLS does, but it lags the unemployment rate release by a month.
Posted by: geoff at January 05, 2011 06:59 AM (mMh1M)
That's what I figured as well. Interesting that none of the articles make that connection.
This is the message I've been trying to convey every month with the Initial Unemployment Claims post. But it hasn't really taken root.
Posted by: geoff at January 05, 2011 07:00 AM (mMh1M)
Not entirely true. A lot of those "minimum wage jobs" are people who won't be on unemployment anymore, or who can start paying more of their bills.
The other thing is that, locally, I'm seeing a lot of places still hiring. They're not awesome jobs, but mechanics and restaurants and banks all seem to be hiring around here, and those tend to be the upper end of "low income" (say, 10+/hr for mechanics and bank tellers, and good waiters make good money in tips: $100+ a day is pretty easy at a mid-range restaurant if you bother actually to serve your customers)
Posted by: AllenG (Dedicated Tenther) at January 05, 2011 07:01 AM (8y9MW)
More like hyper-inflation, given the 3 (or 4?) "quantitative easing" measures Helicopter Ben has undertaken during his tenure.
Posted by: Kratos (Ghost of Sparta) at January 05, 2011 07:01 AM (9hSKh)
I really wish this were real, but currently I simply see no driver for a substantial turnaround. I'm open to those with deeper insight than mine on the topic, but it looks seasonal to me.
Posted by: Circa (Insert Year Here) at January 05, 2011 07:02 AM (B+qrE)
"Palin Wins Again" Ben Smith - Politico LINK
Robert Pear [NYT] reports that end-of-life planning has, again, been dropped from health care regulations.
Posted by: mrp at January 05, 2011 07:02 AM (HjPtV)
So how many of those service jobs were seasonal and will be gone in Jan/Feb?
Those people will all be employed as Dead Bird Picker-Uppers now.
Posted by: Mama AJ at January 05, 2011 07:05 AM (XdlcF)
Posted by: Jane D'oh at January 05, 2011 07:09 AM (UOM48)
Posted by: Mary Cloggonstien from Brattleboro, VT at January 05, 2011 10:52 AM (SZy+Y)
Fooooooooor he's a Jugeared McFuckstick, he's a Jugeared McFuckstick, he's a Jugeeeeeeeeeared McFuuuuuuuuuuuuuuckstiiiiiiiiiick, nobody touch his pie.
that what you had in mind, you insufferable scrunt?
Posted by: Unclefacts, Confuse A Cat, Ltd. at January 05, 2011 07:11 AM (eCAn3)
Posted by: kansas at January 05, 2011 07:12 AM (mka2b)
Wednesday, January 6, 2010
Nonfarm private employment decreased 84,000 from November to December 2009 on a seasonally adjusted basis, according to the ADP National Employment Report.
Posted by: Laurie David's Cervix at January 05, 2011 07:13 AM (MCU/2)
Posted by: Astrocanis at January 05, 2011 07:15 AM (GIMzg)
I'd like a description of the mechanism where a strong dollar makes oil prices rise.
Posted by: toby928™ at January 05, 2011 07:16 AM (S5YRY)
Heh. I've always been wary of the Slinky Chart. Right up there with the Falling Dagger chart.
Posted by: CDR M at January 05, 2011 11:12 AM (5I8G0)
I'm usually leery of the "We pulled it out of our ass" charts.
Posted by: Unclefacts, Confuse A Cat, Ltd. at January 05, 2011 07:16 AM (eCAn3)
Posted by: Jane D'oh at January 05, 2011 07:16 AM (UOM48)
Posted by: toby928™ at January 05, 2011 11:16 AM (S5YRY)
I'd like a description of where she's getting the "strong dollar". QE2 anyone?
Posted by: Unclefacts, Confuse A Cat, Ltd. at January 05, 2011 07:17 AM (eCAn3)
Eh.
I'm pretty sure the usual RINO's will indeed figure out new ways to give it to us up the @ss in the next two years.
But then again, I'm a pessimist.
Posted by: shibumi at January 05, 2011 07:18 AM (OKZrE)
Posted by: Unclefacts, Confuse A Cat, Ltd. at January 05, 2011 07:19 AM (eCAn3)
The media is orgasming this morning, but of course the real story here is that we don't know how much of this is seasonal (and will disappear in January) and how much of it constitutes actual permanent employment.
Posted by: shibumi at January 05, 2011 07:20 AM (OKZrE)
The NY Slimes recently reported that 80 percent of the new hiring was temp help, and since they're the Head Cheerleaders for King Barry, it might actually be higher than that
Posted by: kbdabear at January 05, 2011 07:20 AM (vdfwz)
I'd like a description of the mechanism where a strong dollar makes oil prices rise.
Relax, it's the Age of Stupidtm. This too shall pass. One way or the other.
Posted by: Circa (Insert Year Here) at January 05, 2011 07:21 AM (B+qrE)
Employment among large businesses, defined as those with 500 or more workers, increased by 36,000 while employment among medium-size businesses, defined as those with between 50 and 499 workers, increased by 144,000. Employment among small-size businesses, defined as those with fewer than 50 workers, increased by 117,000.
So, big business is still dead in the water. This looks like onesie twosie hiring by smaller companies. Might see those jobs as inherently less stable.
Construction employment was unchanged in December, ending continuous monthly declines since June 2007.
Gotta question that. Coldest winter since the little Ice Age and the hammer lads were still out in the field pounding in two pennies?
Posted by: Laurie David's Cervix at January 05, 2011 07:21 AM (MCU/2)
Posted by: jewells45 at January 05, 2011 07:23 AM (l/N7H)
To quote that famous blue grass movie, "That's dumber than a bag of hammers". The price is oil is going up BECAUSE of a weak dollar. All commodities are.
Yeah, keep printing all that phony money.
Posted by: Vic at January 05, 2011 07:23 AM (M9Ie6)
If I had to bet, those are the mom-and-pops hiring back the people they laid off two years ago.
Posted by: mrp at January 05, 2011 07:24 AM (HjPtV)
Borrow 10 times as much and 3 million jobs would have popped up
The more I charge my Amex card for lapdances, the better looking the dancer and the more she grinds on my junk, so my theory is infallible
Posted by: Paul Krugman, Super Genius at January 05, 2011 07:26 AM (vdfwz)
About the ADP National Employment Report
The ADP National Employment Report, sponsored by ADP, was developed and is maintained by Macroeconomic Advisers, LLC. It is a measure of employment derived from an anonymous subset of roughly 500,000 U.S. business clients. During the twelve month period through June 2010, this subset averaged over 340,000 U.S. business clients and over 21 million U.S. employees working in all private industrial sectors.
The ADP Small Business Report is a monthly estimate of private nonfarm employment among companies in the United States with 1-
49 employees and is a subset of the ADP National Employment Report. The data for both reports is collected for pay periods that can be interpolated to include the week of the 12th of each month, and processed with statistical methodologies similar to those used by the U.S. Bureau of
Labor Statistics to compute employment from its monthly survey of establishments. Due to this processing, this subset is modified to make it indicative of national employment levels; therefore, the resulting employment changes computed for the ADP National Employment Report are not representative of changes in ADPÂ’s total base of U.S. business clients.
ADP is a payroll processing firm, so this stat attempts to estimate the number of workers moving on and off the payrolls of their clients.
Posted by: Laurie David's Cervix at January 05, 2011 07:29 AM (MCU/2)
She was complaining that Oil prices were lowering (thus, being "punished," 'cause, you know, it's bad for the economy when oil prices are lower or something)
Posted by: Unclefacts, Confuse A Cat, Ltd. at January 05, 2011 11:17 AM (eCAn3)
Maybe Europe didn't get the memo?
Posted by: AllenG (Dedicated Tenther) at January 05, 2011 07:32 AM (8y9MW)
Posted by: SurferDoc at January 05, 2011 07:34 AM (o3bYL)
Posted by: Gregory of Yardale at January 05, 2011 07:42 AM (PLvLS)
The guy from ADP was releasing the number on CNBC. As soon as he
gave the number he said it looked odd and gave 4 or 5 reasons why it may
not be as high as it seems.
Some of his reasons included a 5 week period vs the usual 4 (with a late Black Friday), acctg changes(?), their EOY catch-up adjustments, etc..
FWIW
Posted by: Laurie David's Cervix at January 05, 2011 07:43 AM (MCU/2)
Posted by: Whoopie's whoopie cushion at January 05, 2011 07:46 AM (pr+up)
Following the too good to be true ADP number, the December Services ISM number came at 57.1 on a 55.7 consensus and an improvement from November's 55- a multi-year high. Yet the usual casual glance behind the scenes confirms once again that disparate economic data series are in complete contradiction with each other: the employment index declined from 52.7 to 50.5, which makes absolutely no sense in light of the alleged surge on ADP service-related jobs.
Even Goldman has nothing good to say: "The decline in the employment index, however, suggests that the strong ADP employment number has considerable statistical distortion and should therefore be interpreted with care." But such is life when one runs a ministry of truth with far too many controllable variables. Furthermore, the economic growth through inventory accumulation is continuing, as inventories increased from 51.5 to 52.5. And most importantly for EPS numbers, kiss those margins good bye: prices paid increased from 63.2 to 70.0.
So, battling metrics. Pick a side.
Posted by: Laurie David's Cervix at January 05, 2011 07:47 AM (MCU/2)
MAIN POINTS:
1. The monthly ADP employment report surprised sharply to the upside in December, posting a gain of 297,000 jobs versus consensus expectations of 100,000. This is the best ADP reading currently on record (the official data go back to January 2001, though the series has only been released publicly since 2006). Notably, the initial report for June 2006-since revised-was +368k, which substantially overstated the comparable BLS first print of +90k.
2. The bulk of the December 2010 surprise came from small- and medium-sized service sector firms (+120k and +123k respectively, up from +48k and +30k in November). Goods sector employment growth was still soft, with manufacturing up 23,000 (vs +15k in November) and construction up 6,000 (vs. +10k in November). ADP's estimate of financial sector employment was down 6,000, versus a gain of 2,000 in November.
3. The ADP data have a special quirk that could have affected today's report. ADP records payrolls based on the number of names on the payroll-regardless of how many hours they work during the week. Not every firm immediately "cleans" payrolls when an employee quits or is laid off; in some cases, it can take until the end of the year for the payroll list to be officially updated. This creates a lot of volatility in the December report in particular. In theory, one would expect greater purging in payrolls in bad years (like 2008 and 2009) and less in relatively better years (2010 was hardly spectacular, but at least payrolls were up on the year). Of course, the official report attempts to adjust for this behavior, but if 2010 saw relatively less purging than the sample period, it's possible some of today's improvement could be the result of this data quirk rather than genuine acceleration. Given the potential for an overstatement, we have put a -1 judgmental adjustment on our US-MAP reading, which still records a significant upside surprise.
4. Luckily, we will have a useful cross-check of the ADP report later on this morning. If service-sector employment really is accelerating sharply, we'd expect to see the employment index of the ISM non-manufacturing survey (which was 52.7 last month) post a meaningful increase. This report will be released at 10am and will help us gauge how much weight to put on the very strong ADP report.
Since the now released ISM report and today's ADP report were significantly dissimilar, something odd is happening.
Posted by: Laurie David's Cervix at January 05, 2011 07:56 AM (MCU/2)
Posted by: ParisParamus at January 05, 2011 07:59 AM (bN5ZU)
Posted by: t-bird at January 05, 2011 08:06 AM (FcR7P)
"Triangle jobless rate inches up"
In November, 99 out of NC's 100 counties reported an increase in their unemployment rates. In the Triangle area, the unemployment rate rose from 8.0% to 8.3%
Posted by: mrp at January 05, 2011 08:20 AM (HjPtV)
Posted by: ParisParamus
It tracks the change in the number of names in the payroll database. It doesn't count hours actually worked or note full/part time status.
Posted by: Laurie David's Cervix at January 05, 2011 08:22 AM (MCU/2)
Posted by: Dr. Heinz Doofensmirtz at January 05, 2011 08:27 AM (Ltulx)
Posted by: curious at January 05, 2011 08:35 AM (p302b)
Posted by: Steve at January 05, 2011 08:37 AM (U0/Zv)
Posted by: DocJ at January 05, 2011 08:56 AM (dt6br)
Posted by: Bill Mitchell at January 05, 2011 09:08 AM (Baf0e)
So, battling metrics. Pick a side.
I prefer the ADP data - I think it's more quantitative and does a better job of capturing trends in small businesses. And while there are conflicts between the ISM polls and the ADP payroll data, there are also plenty of conflicting signals within the ISM polls themselves. If you're going to stack up the ISM numbers against ADP's, you'd best resolve the ISM discrepancies first..
As to the possible problems with December itself: this is why I show the plot. If there's a big problem with Decembers, the data doesn't show it. It also doesn't show much rippling due to cycling between 4 and 5 week payroll periods.
That said, I think 300K is anomalously high and is best interpreted as a confirmation of a steady, but not spectacular, healing rate.
Posted by: geoff at January 05, 2011 09:33 AM (mMh1M)
Posted by: Jean at January 05, 2011 10:00 AM (c3oPV)
That the ADP number was the single biggest gain in 10 years is a pretty big wtf signal itself. Did last month really feel like jubilation day? The only driving event in the 11/15 thru 12/15 period seems to be the aftermath of the Republican election victory, If there was that much enthusiasm for Republicans among the throng, in the election we should have taken 100 net seats and the Senate.
Posted by: Laurie David's Cervix at January 05, 2011 02:25 PM (ePb5n)
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Posted by: Ella at January 05, 2011 06:47 AM (mROFd)