January 2018 ADP Job Growth Is 234,000

ADP reported non-farm private jobs growth at 234,000.

Analyst Opinion of ADP Employment Situation

This month the rate of ADPs private employment year-over-year growth remained in the tight range seen over the last year.

ADP employment has not been a good predictor of BLS non-farm private job growth.

The market expected from Bloomberg / Econoday 160,000 to 234,000 (consensus 195,000) versus the 234,000 reported. These numbers are all seasonally adjusted;

In Econintersect‘s January 2018 economic forecast released in late December, we estimated non-farm private payroll growth at 165,000 (based on economic potential) and 180,000 (fudged based on current overrun / under-run of economic potential).

This month, ADP’s analysis is that small and medium sized business created 64 % of all jobs [historically a relatively small percentage].

Manufacturing jobs grew 12,000.

91 % of the jobs growth came from the service sector.

The December ADP report (last month), which reported job gains of 250,000 was revised to 241,000

The three month rolling average of year-over-year job growth rate is 2.1 % (unchanged from last month)

ADP changed their methodology starting with their October 2012 report, and ADP’s real time estimates are currently worse than the BLS.

Per Mark Zandi, chief economist of Moody’s Analytics:

The job market juggernaut marches on. Given the strong January job gain, 2018 is on track to be the eighth consecutive year in which the economy creates over 2 million jobs. If it falls short, it is likely because businesses can’t find workers to fill all the open job positions.

Per Ahu Yildirmaz, VP, and head of the ADP Research Institute.

We’ve kicked off the year with another month of unyielding job gains. Service providers were firing on all cylinders, posting their strongest gain in more than a year. We also saw robust hiring from midsize and large companies, while job growth in smaller firms slowed slightly

Jobs growth of 150,000 or more is calculated by Econintersect to the minimum jobs growth to support population growth (see caveats below). The graph below shows ADP employment gains by month.