Pre-benchmarking jobs: +11,000. Private-sector measures not immune to data mess. Trend shows “employers have been cautious with hiring.”
By Wolf Richter for WOLF STREET.
Payroll processing firm ADP conducted its annual preliminary adjustment today to the full-year 2024 Quarterly Census of Employment and Wages data released by the Bureau of Labor Statistics on September 9. The QCEW provides a quarterly count of Paid Employment based on the quarterly payroll tax filings by employers, covering about 95% of payroll jobs, but the BLS releases it annually with a long lag. On September 9, the BLS announced its own preliminary benchmarking adjustment to the QCEW for the 12-month period through March 2025 (we discussed this mess here). Today it was ADP’s turn.
As part of the annual adjustment, ADP reduced its September job count by 43,000 jobs. Companies added 11,000 jobs to their payrolls in September, per pre-benchmarked data. The 43,000-job adjustment to benchmark the data to the 2024 QCEW took this small job gain to a job loss of 32,000.
Same thing for August: ADP applied the 2024 QCEW benchmark adjustment of 57,000 jobs to the August job gain of 54,000 jobs, which flipped it to a job loss of 3,000. The ADP data is seasonally adjusted.
The erratic month-to-month changes and adjustments are somewhat leveled out with the three-month average (blue line in the chart above), which shows a substantially slowing job growth, which is what we have seen in other data as well.
“Despite the strong economic growth we saw in the second quarter, this month’s release further validates what we’ve been seeing in the labor market, that U.S. employers have been cautious with hiring,” ADP said.
Total employment in the private sector, per ADP, was 134.53 million, up by 1.15 million from a year ago, after the benchmark adjustments:
The median increase in wages in September, year-over-year, based on a subset of 14.8 million workers employed for at least 12 months, whose paychecks ADP processed:
- For “Job Stayers”: +4.5%, roughly the same increase as over the prior 6 months.
- For “Job Changers”: +6.6%, down from the 7.0% to 7.1% range in the prior 6 months.
Due to the government shutdown, the BLS may not release its employment report on Friday, and the ADP data may be all we get for now in terms of payroll count and wages for September.
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A passing thought: Much of this “strong economic growth” revolves around the rapid growth of A.I., where the goal of A.I. is to eliminate the need for human labor.
IOW, this isn’t just another economic cycle, it’s a sign of the future.
Bingo. I am not sure why there has not been a correlation with job losses vs AI. Like the internet age of the 90s, this isn’t new. The only difference is the product being made. The internet was a change for all income levels, even at its infincy. AI will most likely not benefit the average Joe/Jane. Business is ahead on this one.
This downward revision caused the major market indices to begin climbing this morning, I would believe, despite the government shutdown beginning.
It seems like the market is drunk on the idea of rate cuts. Bad employment data used to mean recession coming, market down. Now bad employment data means better chance of rate cut, market up. When the correction finally happens it could be epic.
Except the data isn’t that bad. Employment is essentially full. The UE rate for 25-54 year olds is 3.6%. It was 3% in 2022, so it has barely inched up.
I meant to add that the labor participation rate for the same group is 83.7. It was 83.9 last year but around 82 in 2022. Then it flattened for about a year, then accelerated.