SOURCE: Automatic Data Processing, Inc.

March 05, 2008 08:15 ET

ADP National Employment Report Shows U.S. Employment Declined by 23,000 Private Sector Jobs in February

ROSELAND, NJ--(Marketwire - March 5, 2008) - According to today's ADP National Employment Report (SM), private sector employment declined by 23,000 in February. The ADP National Employment Report, created by ADP ® Employer Services, a division of Automatic Data Processing, Inc. (ADP), in partnership with Macroeconomic Advisers, LLC, is based on actual payroll data and measures the change in total nonfarm private employment each month.

Nonfarm Private Employment Highlights – February Report:

  --  Total employment:                -23,000

  --  Small businesses*                +15,000
  --  Medium businesses**               -4,000
  --  Large businesses***              -34,000

  --  Goods-producing sector:          -70,000

  --  Service-providing sector:        +47,000

  --  Manufacturing industry:          -40,000

* Small businesses represent payrolls with 1-49 employees
** Medium businesses represent payrolls with 50-499 employees
*** Large businesses represent payrolls with more than 499 employees

According to Joel Prakken, Chairman of Macroeconomic Advisers, LLC, "Nonfarm private employment declined 23,000 from January to February 2008 on a seasonally adjusted basis, according to the ADP National Employment Report. The estimated change in employment from December 2007 to January 2008 was revised down 11,000 to 119,000. February's decline of 23,000 signals a deceleration of employment growth across businesses of all sizes."

Prakken added, "Employment in the service-providing sector of the economy grew 47,000, while employment in the goods-producing sector declined 70,000, the fifteenth consecutive monthly decline. Manufacturing employment fell 40,000 in February after declining a revised 3,000 in January, and marked the eighteenth consecutive monthly decline."

"Most of the decline in employment during February was accounted for by job losses at large companies, but there was a notable deceleration of employment growth at businesses of all sizes. Employment among small-size businesses, defined as those with fewer than 50 workers, advanced just 15,000 during the month, while employment among medium-size businesses with between 50 and 499 workers dropped 4,000. This was the first outright decline at medium-size businesses since June of 2003, when job growth was still recovering from the last recession. Employment at large businesses with more than 500 workers declined 34,000," said Prakken.

Prakken went on to say, "Two sectors of the economy hit hardest by recent problems in mortgage markets have been residential construction and financial activities related to home sales and mortgage lending. In February, construction employment fell 30,000. This is the fifteenth consecutive monthly decline, bringing the total decline in construction jobs since the peak in August 2006 to 236,000. Employment in financial activities declined by 5,000."

|  Notice of Annual Revisions to the ADP National Employment Report(TM)  |
|                                                                        |
| Automatic Data Processing, Inc, in conjunction with Macroeconomic      |
| Advisers, LLC, has published the scheduled annual revisions to the     |
| estimates of employment shown in the ADP National Employment Report.   |
| Revisions include:                                                     |
|                                                                        |
| --  Updated regression estimates used to adjust for historical         |
|     differences in the variances of the monthly growth rates of        |
|     employment reported by the Bureau of Labor Statistics and computed |
|     from the ADP data.                                                 |
| --  Updated estimates of the differences in the historical averages of |
|     the growth rates of employment reported by the Bureau of Labor     |
|     Statistics and computed from the ADP data.                         |
| --  Updated estimates of historical seasonal factors.                  |
| --  The reference month for establishing the levels of employment      |
|     shown in the ADP National Employment Report advanced from March of |
|     2006 to March of 2007.                                             |
|                                                                        |
| Note: These revisions are published in accordance with the previously  |
| stated schedule of annual benchmark revisions to the ADP Report. No    |
| revisions have been made to the methodology of computing the estimates |
| of employment shown in the ADP National Employment Report. Visit       |
| for details.                               |
|                                                                        |

The matched sample used to develop the ADP National Employment Report was derived from ADP data which, during the last six months of 2007, averaged approximately 392,000 payrolls representing nearly 24 million U.S. employees. This approximately represents the size of the matched sample used this month.

Small Business Highlights - February Report:

Due to the important contribution small businesses make to economic growth, employment data that is specific to businesses with fewer than 50 employees will be reported in the ADP Small Business Report (SM) each month. The ADP Small Business Report is a subset of the ADP National Employment Report.

  --  Total small business employment: +15,000
  --  Goods-producing sector: -20,000 small business jobs
  --  Service-providing sector: +35,000 small business jobs

Private employment among small businesses increased by 15,000 in February, according to the ADP Small Business Report released today. Additional information about small business employment, including charts on monthly job growth and employment levels, along with historical data, is available at

"Employment among small-size businesses, defined as those with fewer than 50 workers, advanced just 15,000 during the month. While this employment growth contrasts with employment declines among medium- and large-size businesses, it is the smallest gain in employment among small-size businesses since November 2002," said Joel Prakken.

To obtain additional information about the ADP National Employment Report, including additional charts, supporting data and the schedule of future release dates, or to subscribe to the monthly e-mail alerts and RSS feeds, please visit The March 2008 ADP National Employment Report will be released on Wednesday, April 2, 2008 at 8:15 a.m. ET.

About the ADP National Employment Report (SM)

The ADP National Employment Report, sponsored by ADP®, was developed and is maintained by Macroeconomic Advisers, LLC. It is a measure of employment derived from an anonymous subset of roughly 500,000 U.S. business clients. During the last six months of 2007, this subset represented approximately 392,000 U.S. business clients and nearly 24 million U.S. employees working in all private industrial sectors. The ADP Small Business Report (SM) is a monthly estimate of private nonfarm employment among companies in the United States with 1-49 employees and is a subset of the ADP National Employment Report. The data for both reports is collected for pay periods that can be interpolated to include the week of the 12th of each month, and processed with statistical methodologies similar to those used by the U.S. Bureau of Labor Statistics to compute employment from its monthly survey of establishments. Due to this processing, this subset is modified to make it indicative of national employment levels; therefore, the resulting employment changes computed for the ADP National Employment Report are not representative of changes in ADP's total base of U.S. business clients.

Empirical analysis performed by Macroeconomic Advisers suggests that the ADP National Employment Report can be used to develop a forecast of "true" employment that is superior to those resulting from consensus estimates, survey data, or other models of employment that do not incorporate the results of the ADP Report.

For a description of the underlying data and the statistical properties of the series, please see "ADP National Employment Report: Development Methodology" at http://ADPemployment

About ADP

Automatic Data Processing, Inc. (NYSE: ADP), with nearly $8 billion in revenues and approximately 585,000 clients, is one of the world's largest providers of business outsourcing solutions. Leveraging more than 55 years of experience, ADP offers the widest range of HR, payroll, tax and benefits administration solutions from a single source. ADP's easy-to-use solutions for employers provide superior value to organizations of all types and sizes. ADP is also a leading provider of integrated computing solutions to auto, truck, motorcycle, marine and recreational vehicle dealers throughout the world. For more information about ADP or to contact a local ADP sales office, reach us at 1.800.225.5237 or visit the company's Web site at

About Macroeconomic Advisers, LLC

Macroeconomic Advisers, LLC (MA) has been the most trusted source for U.S. macroeconomic forecasts and commentary, monetary and fiscal policy analysis, and econometric modeling for 25 years. MA's clients include leading financial service firms, nonfinancial corporations, key policymaking agencies of the U.S. government, as well as State and Foreign Government agencies. Additional information on Macroeconomic Advisers, LLC is available on the company's Web site,

The ADP National Employment Report is a trademark and service mark of ADP of North America, Inc.

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