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Private Hiring Slams Into Reverse As ADP Headline Goes Negative
Private sector employers in the US -- that'd be the businesses on whose shoulders job creation now s
Will data drop on Friday, July 4?
No. Jobs report is tomorrow
Given the cutbacks at BLS, one wonders how long ADP will remain the less reliable indicator.
Anecdotally, our commercial real estate management and government contractor contacts report significant cut backs/layoffs. All are small businesses with too much concentration in contracts. I have to believe that small DEI companies in particular have been especially hard hit in the gov con sector.
Some of the big government contracting companies have disclosed large layoffs. E.g. BAH cut 2,500 (7% of its workforce).
Large layoffs also announced in tech, although may not have hit ADP data yet. E.g. MSFT cut 6,000 in May and is now doing another 9,000 (totaling 6-7% of workforce).
These companies are hiring for other positions, e.g. BAH cutting in civilian agency groups and adding in defense/intel groups, but I suspect the net is still MSD% of workforce.
Amazon told 350,000 employees to Return To Office (RTO) or consider themselves resigned. I am not sure what the fallout will be from that.
I have three young family members graduating with graduate level degrees from very good universities this year and next. They are worried about their job prospects. Though honestly I don’t know which is worse, going into college or graduating from college right now.
If the boss keep barring international graduate students the job prospects for some professional jobs may rise.
I was curious about the difference between ADP and BLS reports.
The ADP report used to be an attempt to forecast the BLS report. In 2021 ADP changed its report: “the new ADP NER is an independent measure of the US labor market, rather than a forecast of the BLS monthly jobs number. Jobs report and pay insights are based on anonymized and aggregated payroll data from more than 25 million US employees across 500,000 companies. The new report focuses solely on ADP’s clients and private-sector change.”
Before that, explanations of why ADP deviated from BLS included:
– ADP includes only private non-farm payrolls, while the BLS includes both private and government non-farm payrolls.
– ADP released just one report, the BLS releases an initial figure that’s revised twice to include late survey responses.
Either way, each is just an estimate. ADP only covers 500K companies and 25MM employees, and perhaps some types of companies are more/less likely to use ADP. BLS is survey-based and I gather survey response rates are declining.
I imagine the best data would be from Federal tax reporting data, but that doesn’t seem to be available for this use – too busy tracking down tax-paying illegals I guess.
Thanks JL. Your usual usefull follow up. (Too many “u” s, right?)
I once thought that their numbers reflected data solely from their paying customers. When I finally got off of my sumo-wretler-sized butt and looked it up, I was disappointed to find it was data “infered” from their client base and other data sources. So another set of razzle-dazelled up set of stas, to please analysts and dutifully be scraped up as fact by your favorite LLM.
Tying in AI, it’s almost funny how “everyone” seems to attribute MSFT’s layoffs in the sales area to AI use. So AI is replacing thousands in the sales departments? Might it might be that the company overstafed for a boom in AI sales which never eventuated? That certainly would not be something that MSFT would want to publicly admit to….
Exactly. I don’t trust companies selling AI (Microsoft, Google, Meta, Nvidia) to be honest about their assessment of AI impact on productivity and thus employement