To what extent do we determine the growth of private nonfarm employment? The Quarterly Census of Employment and Wages (QCEW) to December raised some concerns.
figure 1: Month-over-month changes in private nonfarm payrolls from CES (bold black), ADP (green), the author's seasonally adjusted QCEW using X-13 (tan), and Business Employment Updates (light blue), all in the 000s . Sources: BLS, ADP (via FRED), and author's calculations.
By the end of the fourth quarter, employment changes (but not growth rates) had converged, although the autumn QCEW changes were noticeably smaller.
In level:
figure 2: Private NFP levels from CES (bold black), ADP (green), author's seasonally adjusted QCEW using X-13 (tan), and Q4 2019 private NFP levels accumulated from CES Corporate employment dynamics (light blue), all 000. Sources: BLS, ADP (via FRED), and author's calculations.
Growth in covered QCEW (which is distinct from CES NFP coverage) has slowed significantly, as has growth implicit in corporate employment dynamics. On the other hand, the ADP series continues to grow like the BLS series.
What about total non-farm employment?
image 3: Nonfarm employment levels from CES (bold black), Philadelphia early benchmark (light green), QCEW seasonally adjusted by the authors using X-13 (tan), and Current Population Survey adjusted for NFP concepts (purple), all in 000 of. The early baseline is calculated using the ratio of the state sum early baseline to the state sum. Source: Bureau of Labor Statistics, Federal Reserve Bank of Philadelphia, and author's calculations.
QCEW's growth also declined dramatically. The latest data will be revised over time as more administrative data becomes available. Reassuringly, the Philadelphia Fed's early benchmark series, which relies on QCEW data, is very close to the official NFP series.
