How confident are we of private NFP growth? Other concerns from the Quarterly Census of Employment and Wages (QCEW) through December.
Figure 1: Month-to-month changes in private non-farm employment from CES (bold black), from ADP (green), from QCEW periodically updated by author using X-13 (tan), and from Business Employment Dynamics (blue), all 000 for. Source: BLS, ADP via FRED, and author’s calculations.
Changes in employment (not the growth rate) have moderated since the end of Q4, although the change in the QCEW was much smaller in the fall.
At levels:
Figure 2: Non-farm private employment rate from CES (black), from ADP (green), from QCEW adjusted periodically by the author using X-13 (tan), and changes in Business Employment Dynamics aggregated to the 2019Q4 level of Private NFP from CES (light blue), all in the 000’s. Source: BLS, ADP via FRED, and author’s calculations.
QCEW Coverage (which differs from CES NFP coverage) growth slowed significantly, as did growth from Business Employment Dynamics. On the other hand, the ADP series continued to grow in line with the BLS series.
What about perfect NFP?
Figure 3: Nonfarm payroll employment rate from CES (bold black), from Philadelphia’s first benchmark (green), from QCEW adjusted periodically by author using X-13 (tan), and from Current Population Survey adjusted concept of NFP (purple), all 000 of. The early benchmark is calculated using the ratio of the total regions of the initial benchmark to the total regions. Source: BLS, Philadelphia Fed, and author’s statistics.
Again the QCEW is very low in growth. The latest numbers will be updated over time as more administrative data comes in. The research series (CPS employment adjusted for NFP concept) shows a significant decrease, which may be related to the new population control introduced in the new year. What is reassuring is that the Philadelphia Fed’s first bench series, which relies on QCEW data, remains very close to the official NFP series.
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