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US Employment: ADP Says 91,000 New Jobs Created for Private Sector

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The October Labor Department report is expected to show the creation of roughly 90,000 September jobs. (Image: Dominik Gwarek)
The October Labor Department report is expected to show the creation of roughly 90,000 September jobs. (Image: Dominik Gwarek)


  • ADP reports 91,000 new private sector jobs; 5,000 jobs lost for factories
  • Layoff announcements exceeded 115,000 last month
  • ADP says small, medium-sized businesses fuel job growth

The United States saw over 91,000 private-sector jobs added this month according to reports from Automatic Data Processing (ADP) and consulting firm Macroeconomic Advisers. Over 1,000 jobs were created in goods-producing industries, but factory employment did see a job drop of 5,000 jobs.

The government will post its latest unemployment rate today. Most economists are expecting official numbers to reveal a modest improvement in employment.

Paul Ashworth, Economist for research firm Capital Economics, told the Wall Street Journal that ADP report will likely alleviate public concern regarding a second recession, but it does not necessarily indicate a recovery. According to Ashworth, as a result of the general public expecting the worst, many are encouraged by weak growth figures.

Numbers: ADP vs. Labor Department

The ADP report is based on data recorded from 340,000 companies with over 21 million employees on payrolls. Out of its past six reports, the ADP March figure was most similar to the Labor Department's estimate, understating the gain by 29,000.

In comparison, last month's ADP report recorded August gains by 91,000 while the Labor Department only recorded an increase of 17,000. The October Labor Department report is expected to show the creation of roughly 90,000 September jobs.

Exeeding Forecasts

Macroeconomic Advisers Chairman Joel Prakken believes that the government report will exceed forecasts due to the return of over 40,000 Verizon workers who were recently on a two-week strike.

Ford may also contribute to a lower unemployment rate as the company creates 1,600 new jobs in its Claycomo plant and 1,100 jobs in its Chicago plant. Kohl's plans on increasing its workforce by 5% to 40,000 new, seasonal workers.

A Reuters poll shows that the number of private payrolls may grew 100,000 last month, a dramatic increase from 17,000 in August. In addition, a report released in October by outplacement firm Challenger, Gray & Christmas revealed a significant rise in layoff announcements last month totaling over 115,000, a 212% increase from the year-earlier period.

Government cuts, especially in the military, and layoffs at Bank of America together account for roughly 70% of the announced layoffs. More government layoffs are likely in the near future due to tight budgets.

ISM Reports Sector Growth, Declining Job Index

According to the Institute for Supply Management, service-sector growth is outperforming manufacturers. Non-manufacturing activity held a monthly index of 53 in September, slightly below that of August's 53.3 number.

Manufacturing orders have contracted for the third consecutive month, with the manufacturing sector's index at 51.6. Technically, the sector is still expanding as long as it remains above 50.

The ISM employment index dropped below 50 for the first time in over a year to 48.7. Anthony Nieves, a chairman of the survey committee, told the Wall Street Journal that many companies are taking a “wait-and-see approach” and are unlikely to begin hiring until the economy begins to improve.

ADP reports that companies with over 499 workers cut nearly 5,000 positions, while medium-sized businesses that have roughly 50 to 499 employees increased employment by 36,000. Small businesses added the most jobs, with over 60,000 new positions.

Federal Reserve Chairman Ben Bernanke told the Joint Economic Committee that the central bank is ready to take additional steps to encourage growth. Fed officials are quoted in Bloomberg as expecting a “somewhat slower pace of economic growth over coming quarters.”

Key Statistics – US Employment (source: US Department of Labor, August 2011)

  • Unemployment rate: 9.1%
  • Average Hourly Earnings: -0.03 change
  • Employment Cost Index: +0.6%
  • Productivity: -0.7%
  • Unemployment Initial Claims: 391,000 for week ending September 24
  • Unemployment Claims 4-Week Average: 417,000 for week ending September 24
  • Federal Minimum Wage: $7.25

By Nicole Manuel for
Nicole Manuel is a freelance economics, finance and blog writer with a degree in economics and over two years of experience.

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