ADP National Employment Report
The ADP NER (National Employment Report) showed that the private sector only added 169,000 jobs in April 2015. These additions were the lowest since January 2014. It was the second time since January 2014 that additions were lower than 200,000. In more negative news, private job additions for March were revised downward. They only showed an increase of 175,000 from 189,000 reported earlier.
The NER showed that according to company size, small-sized businesses with one to 49 employees added 94,000 jobs in April. This was the most jobs among businesses—compared to an upwardly revised 105,000 additions by small businesses in March.
Mid-sized businesses with 50 to 499 employees followed with an addition of 70,000 jobs. Last month, these businesses added an upwardly revised 64,000 jobs. Large businesses with more than 500 employees only added 5,000 jobs—down from 6,000 jobs added in March.
Service-providing companies were responsible for adding 100.6% of the total jobs added for April. This was because goods-producing companies shed 1,000 jobs during the month. Service sector companies like Western Union (WU), Anthem (ANTM), and Expedia (EXPE) gained after the report was released.
According to the NER’s industry classification, trade, transportation, and utilities added 44,000 jobs in April. It was followed by professional and business services with 34,000 jobs added in the month. The manufacturing industry actually saw jobs fall by 10,000 in April.
Why did the manufacturing sector lose jobs?
The manufacturing sector was affected by:
- low energy prices that have affected orders from energy companies
- strong US dollar (UUP) affected the competitiveness of US goods
- lingering effects of the unusually severe winter weather
Impact of the report
Like non-farm payrolls, this report also affects industrials-related ETFs like the SPDR Industrial Select Sector Fund (XLI) and the First Trust Industrials AlphaDEX Fund (FXR). Materials and home-related ETFs like the SPDR Materials Select Sector Fund (XLB) and the iShares Dow Jones US Home Construction Index Fund (ITB) and large-cap ETFs (SPY) (DIA) (IVV) also watch out for the report.
In the next part of this series, let’s look at the US trade deficit.