ADP Employment Spikes But Multinationals “Signal A Threat”

Last month saw ADP notably under-predict BLS’ payrolls data (for the third month in a row) and was expected to increase in July from +177k to +186k but smashed that expectation, printing +219k – the highest since Feb 2018 (and well above the +185k exp for Friday’s payrolls).

Medium-sized firms saw the largest increase in employment, with services adding 177k (and goods adding 42k) in July.

“The labor market is on a roll with no signs of a slowdown in sight,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Nearly every industry posted strong gains and small business hiring picked up.”

However, Mark Zandi, chief economist of Moody’s Analytics, said that while “the job market is booming, impacted by the deficit-financed tax cuts and increases in government spending,” he sees a potential problem:

“Tariffs have yet to materially impact jobs, but the multinational companies shed jobs last month, signaling the threat.”  

Finally we note that on average during President Trump’s tenure, ADP has – on average – had no bias in its reporting compared to BLS data, this is notably different from the systemic under-reporting that ADP did relative to BLS during Obama’s tenure…



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Author: Tyler Durden