ADP’S REPORTS JOB GROWTH FOR APRIL…JUST BARELY

Let’s hope today’s ADP National Employment Report is wrong. Nonfarm private employment increased by a meager 32,000 last month, according to this report. The general trend is fine, but that’s far below the consensus forecast by economists for this Friday’s government update on April payrolls. More importantly, a net rise of 32,000 is hopelessly insignificant given the extent of the 8-million-plus job losses in the Great Recession. But what the economy needs, and what it ultimately gets, may be two different things.


The crowd, however, is expecting that the Labor Department will report net job creation in the private sector of nearly 190,000 for April, according to Briefing.com. That a world above ADP’s 32,000 estimate for last month’s change in the labor market. Why the disparity? ADP’s accompanying press release offers a clue:

Unlike the estimate of total establishment employment to be released on Friday by the Bureau of Labor Statistics (BLS), today’s ADP Report does not include any federal hiring in April for the 2010 Census. For this reason it is reasonable to expect that Friday’s figure for nonfarm total employment reported by the BLS will be stronger than today’s estimate for nonfarm private employment in the ADP Report.

ADP’s estimates of the labor market shows that April created jobs for the third straight month. The trend itself, thin though it is, is a step in the right direction. If the government reports an April gain on Friday, as it almost surely will, that’ll make two months in a row for a rise in the official payrolls report. Job destruction is over. But it’s still unclear if job creation of substance and persistence has arrived. Without a significant follow-through on March’s widely hailed bout of job creation, the market may start to have second thoughts about the recovery. Indeed, the labor market is still a gray area in terms of the post-recession era. Recovery is alive in kicking in a number of economic metrics, but job creation has yet to offer convincing evidence that it’s joined the party.
“Today’s report is very encouraging,” Gary Butler, President & CEO, ADP, said in a statement. “The challenging economic environment appears to have stabilized.”
Perhaps, although it’s not yet obvious that the labor market’s revival will suffice. “Private employment will add jobs, but slowly,” opines Aaron Smith, a senior economist at Moody’s Economy.com, via Bloomberg BusinessWeek. “Private hiring needs to accelerate to prevent a substantial softening in the labor market when census hiring ends this summer.”

One thought on “ADP’S REPORTS JOB GROWTH FOR APRIL…JUST BARELY

  1. jason beinstein

    At least we’re seeing improvements in the private sector as far as companies hiring new employees is concerned.. It was far too long where the inverse was the case.
    I don’t believe this number takes into account the large number of employees who are forced to work as consultants/contractors because companies are still afraid to commit to full time positions.
    We’re moving in the right direction and if the Labor Dept’s numbers are correct at 190,000 then hopefully that will continue through the summer when a whole new class of college graduates enter the work force.

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