February 2017 ADP Job Growth Is 298,000 – Again, Greatly Above Expectations

ADP reported non-farm private jobs growth at 298,000. This was a particularily strong report for the second month in a row.

Analyst Opinion of ADP Employment Situation

This month the rate of ADPs private employment year-over-year growth marginally increased. This is the second month of improving year-over-year employment gains. This report is very good with growth in almost every sector.

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

The market expected from Bloomberg / Econoday 152,000 to 215,000 (consensus 183,000) versus the 298,000 reported. These numbers are all seasonally adjusted;

In Econintersect‘s February 2017 economic forecast released in late January, we estimated non-farm private payroll growth at 100,000 (based on economic potential) and 150,000 (fudged based on current overrun of economic potential);

This month, ADP’s analysis is that small and medium sized business created 76 % of all jobs.

Manufacturing jobs grew 32,000.

65 % of the jobs growth came from the service sector.

The January ADP report (last month), which reported job gains of 246,000 was revised to 261,000.

The three month rolling average of year-over-year job growth rate has been slowing declining since February 2015 – it is now 1.89 % (insignificantly better than last month’s 1.86%)

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:

February was a very good month for workers. Powering job growth were the construction, mining and manufacturing industries. Unseasonably mild winter weather undoubtedly played a role. But near record high job openings and record low layoffs underpin the entire job market.

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

February proved to be an incredibly strong month for employment with increases we have not seen in years. Gains were driven by a surge in the goods sector, while we also saw the information industry experience a notable increase.

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.