ADP National Employment Report Definition, What It Covers

What Is the ADP National Employment Report?

The ADP National Employment Report is a monthly report of economic data that tracks the level of nonfarm private employment in the U.S. It is published by Automatic Data Processing. The ADP National Employment Report is also known as the ADP Jobs Report or the ADP Employment Report.

Understanding the ADP National Employment Report

If you're not self-employed or a government employee, there is a decent chance that your pay statement is processed by Automatic Data Processing Inc. (ADP). The firm handles payroll for about a fifth of U.S. private employment, putting it in a unique position to survey trends in the nation’s labor market.

ADP collects data through the payroll services and benefits administration it provides to companies. It issues reports on its findings through a partnership with Stanford Digital Economy Lab.

The ADP National Employment Report is released two days prior to the Bureau of Labor Statistics' employment situation report, which is available on the first Friday of each month. Investors and economists see the ADP report as a preview of the more detailed and comprehensive government data release.

Details of the ADP National Employment Report

The methodology of the ADP National Employment Report is managed by Stanford Digital Economy Lab using figures that are seasonally adjusted.

The report has two main sections: "Change in U.S. Private Employment" and "Pay Insights." Both of these sections are broken down as follows:

Change in U.S. Private Employment: This section provides an overall national number, then it breaks down the numbers by industry (goods-producing and service-providing), region (Northeast, Midwest, South, and West), and establishment size (small, medium, and large). All of these categories are broken down even further: industry by type, regions by smaller regions, and establishment size by the number of employees.

Pay Insights: This section provides an overall median change in annual pay (job-stayers and job-changers). It then breaks the numbers down by industry sector (goods-producing and service-providing) and firm size (small, medium, and large). These are also broken down further as detailed above.

The Monthly ADP National Employment Report

In April 2024, private-sector employment increased by 192,000 jobs. According to the ADP report, the average pace of hiring has grown over the past three months after a slowdown at the end of last year.

The report states that hiring was broad-based in the month with only the information sector, which includes media, telecommunications, and information technology, exhibiting weakness. This sector posted job losses and the smallest pace of growth in pay since August 2021.

Special Considerations

The number of people that are employed can tell us a lot about the state of the economy. Total employment and the rate of unemployment are used to determine when the economy is in a recession. The chart below illustrates the monthly changes in nonfarm private employment data since 2002. As you can see, the COVID-19 pandemic coincided with a dramatic rise in unemployment.

A population that is fully employed and where many people are earning steady paychecks is synonymous with a strong economy. More real goods and services are being produced and, in turn, people are earning the income to buy them. More money is circulating, which triggers an increase in demand for goods and services, plus more job opportunities for people to help manufacture and sell them.

Eventually, demand for labor can outstrip supply. When this occurs, employees have greater bargaining power and can demand better wages, which can lead to falling corporate profits, higher inflation, and pressure to raise interest rates.

The Bottom Line

The ADP National Employment Report provides monthly insight into the nonfarm payroll activity in the United States. The report is helpful in gauging different facets of the U.S. economy and is useful to investors and policy-makers alike.