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ADP private payrolls: Large companies continue to attract workers

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The ADP estimate for nonfarm private employment in October continued to show an increase in net job gains, led by a sharp rise from small service-providing companies as the delta variant’s surge crested.

Companies with more than 1,000 employees continued to account for the biggest portion of the overall increase.

Still, large companies with more than 1,000 employees continued to account for the biggest portion of the overall increase as small and midsize companies struggle to retain workers in a tight labor market.

The headline monthly change in employment—published in advance of the Bureau of Labor Statistics’ more comprehensive jobs report on Friday—rose to a gain of 571,100 jobs from a downwardly revised 522,500 in September.

Out of the net increase of 48,600 jobs, small service-providing companies with 1 to 49 employees accounted for the largest net increase, with 63,370 more jobs added on the month.

This suggests the return of small service-providing companies that were hardest hit by the delta variant’s surge from July to September.

ADP private payrolls chart

For goods-producing industries, the increase came mostly from large companies with more than 1,000 employees; those companies added 56,700 jobs in October compared with 36,100 in September. This also marked the third month in a row of rebounding for these companies from the recent low of 7,100 job gains in July.

Overall, net job gains from the largest companies with more than 1,000 employees continued to account for most of the gains for the second month in a row, with 304,500 jobs added.

At the same time, private companies with 50 to 999 employees added 171,200 jobs on the month, while smaller companies with fewer than 50 employees accounted for 115,400 net job gains.

The takeaway

While the increase in October is an encouraging sign, the ADP data has not been a reliable predictor of the jobs report from the Bureau of Labor Statistics.

But with the recent uptick in economic activity as the impact of the delta variant subsides, there are reasons to believe that Friday’s BLS report will show an improved employment picture for October.

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About Tuan Nguyen

@tuannguyen0709

Tuan Nguyen is an economist at RSM US LLP who analyzes high-frequency economic data within the United States and global economies to better understand the American middle market. Tuan’s data-driven economic analysis and insights enhance the ability of middle market companies to thrive in an increasingly competitive global economy. In December 2023, Nguyen and the economics team were recognized on Bloomberg's list of Best Bond Forecasters after correctly predicting where the benchmark Treasury would end the year.

Based in New York, Tuan works closely with the firm’s cutting-edge Industry Eminence Program to help senior analysts accelerate data-driven strategies in their line of business. His areas of focus include the comprehensive measurement framework for environmental, social and governance (ESG) financial reporting, as well as trends in behavioral, labor and network economics and in industrial organizations. Before joining RSM, he was a graduate researcher, lecturer and teaching assistant for the economics department of his alma mater, Northeastern University, where he taught macroeconomics, international economics and microeconomic theory.

Nguyen holds a Ph.D. in econometrics and quantitative economics from Northeastern University and holds a bachelor of arts in economics and international affairs from the University of New Hampshire, where he graduated summa cum laude and was recognized as an outstanding economics student.

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