It's important to remember one big difference between ADP and the BLS: ADP does not include government employees. But with that in mind, notice that in general ADP tracks the BLS' numbers. They seem to jockey for overall position, but in general move in the same direction.
Let's look at ADP in more detail.
First, notice the ADP and BLS reports generally track each other.
The BLS has service employment increasing last month by 58,000. In the latest ADP survey we see an increase of 12,000. So these series agree that service industries are starting to hire again.
As NDD points out, this is in contrast to the ISM service report which had this to say in its latest report:
Employment activity in the non-manufacturing sector contracted in December for the 23rd time in the last 24 months. ISM's Non-Manufacturing Employment Index for December registered 44 percent. This reflects an increase of 2.4 percentage points when compared to the 41.6 percent registered in November. Four industries reported increased employment, 12 industries reported decreased employment, and two industries reported unchanged employment compared to November. Comments from respondents include: "Decrease in occupancy equals decrease in employment" and "Continuing to aggressively manage costs down."The industries reporting an increase in employment in December are: Other Services; Retail Trade; Finance & Insurance; and Public Administration. The industries reporting a reduction in employment in December — listed in order — are: Arts, Entertainment & Recreation; Real Estate, Rental & Leasing; Mining; Management of Companies & Support Services; Information; Wholesale Trade; Transportation & Warehousing; Accommodation & Food Services; Construction; Utilities; Health Care & Social Assistance; and Professional, Scientific & Technical Services.
The logical conclusion from the ISM report in relation to the BLS/ADP report is the 4 industries that are hiring did so in greater numbers than the 12 that were reporting a decrease in employment. Note that this ISM report is for December (the holiday season) and one of the areas of hiring was retail employment. However, also note that finance and insurance were hiring in the ISM survey and that "professional and business service" employment increased by 86,000 in the BLS survey. In short, it appears as though the professional services sector is very important right now.
In contrast, manufacturing employment is still in the dumps:
But it's important to place this number in historical perspective with two other data points. First, here is a chart of total manufacturing jobs going back to 1979:
Notice that after the last recession we lost about 2.5 million manufacturing jobs that never came back. However --
Overall production (the red line with the arrow underneath it) continued to increase during the 2001 expansion. In other words, the US was making more "stuff," only with fewer people. I would expect that trend to continue after this expansion as well. This means we have two choices regarding the displaced manufacturing workers. Either get more manufacturing business going or retrain them.
However, the BLS and ADP data is in contrast with the ISM Manufacturing survey:
ISM's Employment Index registered 52 percent in December, which is 1.2 percentage points higher than the 50.8 percent reported in November. This is the third month of growth in manufacturing employment, following 14 consecutive months of decline. An Employment Index above 49.7 percent, over time, is generally consistent with an increase in the Bureau of Labor Statistics (BLS) data on manufacturing employment.
Seven of the 18 manufacturing industries reported growth in employment in December in the following order: Apparel, Leather & Allied Products; Printing & Related Support Activities; Petroleum & Coal Products; Paper Products; Transportation Equipment; Machinery; and Electrical Equipment, Appliances & Components. The eight industries that reported decreases in employment during December — listed in order — are: Wood Products; Textile Mills; Miscellaneous Manufacturing; Nonmetallic Mineral Products; Plastics & Rubber Products; Food, Beverage & Tobacco Products; Chemical Products; and Fabricated Metal Products.
In order to coordinate this data with the BLS/ADP data, the logical conclusion is that the number of employers shedding jobs (8 industries) are doing so at a faster rate than those that are adding jobs (7 industries).
Finally, we have initial unemployment claims:
Back in the late spring/early summer, this was one of the first economic numbers that got me thinking the worst was over. Well, it is still moving in the right direction.
Taking all the data into consideration we get the following points:
1.) Service are employment is increasing, despite the numbers from the ISM non-manufacturing survey.
2.) Manufacturing employment is probably going through another round of attrition. That is,, manufacturers are using the current downturn to again shed workers.
3.) Initial unemployment claims continue to move lower.
