ADP: Minus -79,000

Thursday is monthly NFP data. Consensus is for minus 60k — I won’t be surprised if we see double that, a six figure plus drop — minus 100k.

But that’s not due to ADP data. They have been wildly off over the past 6 months, under-forcasting job losses. (Recall their December 2007 Jobs Surge prediction).

My expectations are more of a call based on the weakening consumer, decreased credit availability, and the ongoing housing collapse. Challenger & Gray layoffs are running +47% Year over year.

The ADP Report is a rough number, but its not nearly as bad as it can get. As the chart below shows, we are not quite at full blown recession levels.  Meaning, this can get appreciably worse.



The ADP National Employment Report, June 2008
Wednesday, July 2, 2008, 8:15 A.M. ET


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  1. Theinvestingspeculator commented on Jul 2

    More than 100,000 in job losses, I would say your not alone. Buffett always says he is surpised that job losses aren’t a lot worse. Remember-history doesn’t repeat (like last recessions), it rhymes. My guess is the down turn is going to be longer than people think and job losses are going to get slowly worse.

  2. kett82 commented on Jul 2

    This is just starting to hit the lagging employment areas, retail, foodservice, etc.

  3. Joe Klein’s conscience commented on Jul 2

    There is a reason why job losses aren’t a lot worse. Do you remember hiring figures since the start of this decade(especially post tech bubble)? They stunk. How many times were they above 150,000? Not that often. Long story short, if you don’t hire there is no one to fire.

  4. Steve Barry commented on Jul 2


    Bush claimed to have created 5 Million jobs…40% are supposedly in real estate related areas. That’s 2 Million jobs only needed in a bubble. I fully expect all 2 Million, if they are real, to be lost. Collateral damage on WS and Detroit and retail should bring job losses to 4 Million in about 18 months. I expect, starting tomorrow, losses of 200K a month.

  5. me commented on Jul 2

    What Joe said. They also don’t count anybody as unemployed anymore.

  6. ReturnFreeRisk commented on Jul 2

    The Birth/Death adjustment adds a significant number of jobs for Apr-Jun. Last year it was 150k+ I would not go looking for a 100k+ job losses before next month. There is magic dust in these numbers remember.

  7. Bob_in_MA commented on Jul 2

    They have been wildly off over the past 6 months, under-forcasting job losses.

    Actually, apparently ADP’s figures are usually found to be more accurate after the BLS revises there’s repeatedly. So they always look like they have the greatest divergence over the recent several months.

  8. David Rosenberg commented on Jul 2

    The potential for down 140-150k

    ADP private payrolls sagged 79,000 in June (consensus was -20,000). Considering that this metric has overstated private payrolls in the NFP report by an average of 93,000 so far this year, it would mean that we could actually see a 172,000 negative print on private payrolls if we took this at face value. Throw in an average of +20,000 to +30,000 for government jobs(though we think that state payrolls could take a hit this month) and you’re talking about the potential for down 140,000-to-150,000. We are sticking to our -110,000 call, which was way out of consensus until yesterday –but there is a risk that the headline will be weaker. In any event, there is a risk we will see the first 100,000+ decline in nonfarm payrolls since March 2003.

    We also have other corroborating evidence:

    ISM employment fell from 45.5 in May to 43.7 in June, the lowest since May/03.

    The “spread” Conference Board’s ‘jobs are hard to get’ and ‘jobs are plentiful’ indices deteriorated for the fifth month in a row in June (to 16.4 from 12.2) – the worst level since December 2003.

    Challenger layoffs were very elevated in June at 81,755. While down from the 103,552 May level, they were up an astounding 46.7% YoY in June.

    And, taking the second quarter as a whole, the 275,292 layoff
    announcements were the highest in three years and up 39.4% YoY.

    Challenger hiring plans revealed an even weaker underbelly – a record low for the survey at a mere 4,556 – down 63.7% from a year ago and 36% month-over-month.

    The Monster employment survey slipped to 163 in June from 166 in May – these data are not seasonally adjusted; so, it is best to assess this series on a year-over-year basis and the trend is down to a record low of -12.4%.

  9. grumpyoldvet commented on Jul 2

    What a bunch of Nattering Nabobs of Negativism. Larry, Luskin, Bowyer, Westbury, Kneale shall set you free and prove to you all that everything is coming up roses. How do I know….they will tell me so.

  10. Rex commented on Jul 2

    Private-sector firms in the U.S. lost 79,000 jobs in June, the biggest loss since November 2002, according to the ADP employment index, released Wednesday.

    Employment in the services sector fell by 3,000, the first decline since November 2002.

    Jobs in the goods-producing sector fell by 76,000, the 19th straight decline. Factory jobs fell by 44,000 and construction jobs dropped by 34,000. Employment in financial services fell by 3,000.

    Job gains in May were revised lower to 25,000 from 40,000 earlier. Read the full report.

    The ADP has been much stronger than the government’s payroll numbers in recent months. According to the Bureau of Labor Statistics, payrolls have fallen by 324,000 so far this year through May. ADP says 142,000 net jobs were created through May.

    After adding in some 20,000 government jobs that are created in a typical month but not included in ADP’s index, the ADP number suggests that 60,000 nonfarm payroll jobs were lost in June. The Bureau of Labor Statistics will report on June payrolls on Thursday.

    Economists surveyed by MarketWatch now expect 40,000 net payroll jobs were lost in June, following a loss of 49,000 in May. See Economic Calendar.]

  11. 12th Percentile commented on Jul 2

    Paulson said there would be 500,000 jobs created in the second half. I believe he even named it The Second Half Surge.

    Is there anyone, anywhere with a better track record than Paulson? Right. I didn’t think so.

  12. Anonymouse commented on Jul 2

    Greenie has a much better record (of being wrong) than Paulson. He’s got a higher batting average and a longer track record.

  13. ben commented on Jul 2

    100k or more could be bad, especially if it’s on top of ECB rate hike. Look out.

    Good opp to buy some coal names today.

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