ADP^® National Employment Report

Upcoming reports:

January 05, 2023
February 01, 2023
March 08, 2023
April 05, 2023

The ADP National Employment Report (NER) presents independent measures of the U.S. labor market based on ADP payroll data covering more than half a million companies with more than 25 million employees.

The ADP NER provides a high-frequency, weekly measure of U.S. private-sector employment. In addition, it presents regular measures of wages or earnings for defined samples or segments of the U.S. workforce.

ADP payroll data include payroll transactions data – when a person is paid and how much – as well as administrative data on who is on the company payroll (even if they are not paid in the current pay period), and characteristics of the employer and employee.

We use a business-level database that provides aggregated counts of employment at the level of an ADP Payroll Account. An ADP client company may have one or more Payroll Account. As an approximation, we consider a Payroll Account a business establishment (i.e., a company work location).

We also use a person-level database of payroll transactions that enables us to construct a matched-persons sample to measure changes in wages or earnings over time.

With ADP data, we can measure how many employees are on company payrolls (Payroll Employment) as well as how many employees were paid in a given pay period (Paid Employment). Both measures are of interest, and together provide a richer understanding of the labor market.

Payroll Employment shows how many people have an attachment to an employer in the labor market, while Paid Employment shows how many people are actively working and earning income in the labor market at any given time. The relationship between the two measures may vary across segments of the labor market (e.g., industry, geography, company size) or over time (e.g., recession, pandemic, natural disaster).

Because the underlying ADP payroll databases are continuously updated, we can create high-frequency, near real-time measures of U.S. employment. Also, ADP payroll data at the person level (in addition to the establishment level) enables more detailed, richer analysis.

We use weekly snapshots of ADP payroll data. For Payroll Employment, each week’s snapshot reports the number of employees on payroll at the company that week. For Paid Employment, each week’s snapshot reports on payroll transactions at the company during that week.

Employee pay periods and pay frequency might be weekly, biweekly, semimonthly, or monthly. We have to wait until after the end of the pay period in order to count Paid Employment for the week(s) in the pay period. For example, for employees with monthly pay frequency, we have to wait until after the end of the month before we can produce the Paid Employment count for all weeks during the month.

Using ADP data, for each week, we construct a matched sample of business establishments present in the data in both the current and the previous week. We use data on Payroll Employment to compute the weekly employment growth for each business establishment in the consecutive-week matched sample. For each establishment-week, we calculate employment growth git as

The Quarterly Census of Employment and Wages (QCEW) provides a quarterly count of Paid Employment reported by employers covering more than 95 percent of U.S. jobs. It is the benchmark measure of employment in the U.S., but it is reported with a lag of about five months after the end of the quarter.

The purpose of the ADP NER is to produce a more timely measure of U.S. employment than the QCEW measure of near universe U.S. employment.

To produce a nationally representative measure of employment, we use QCEW data on the national distribution of employment across industries, U.S. states, and business establishment employment size categories to weight the weekly employment growth of establishments in the ADP weekly matched sample.

From QCEW, we obtain counts of employment for industry x U.S. state x establishment size cells, and create weights w_j,t as

where e^QCEW_j,t and e^ADP_j,t are employment in cell j from QCEW and ADP data, respectively. The nationally representative estimate of employment growth is then gt_,weighted given by

where J is the set of industry x U.S. state x establishment size cells, and I_j,t is the set of establishments in cell j in week t. The ADP NER measure of weekly employment growth is used to create an index for U.S. employment, which is then applied to a base period measure of employment level to construct a data series for weekly employment level. We apply the ADP NER weekly employment index to a QCEW base period level of employment to produce the ADP NER measure of weekly employment level.

We use historical ADP payroll data to construct longitudinal data on weekly employment and create a model for seasonal adjustment of weekly employment data. We apply the estimated model to the ADP NER weekly employment data series to create a seasonally adjusted data series for weekly employment.

ADP and BLS both report on jobs (an employee-employer relation), not employed persons; a person may have more than one job.

ADP produces a weekly-frequency data series for jobs in each week, while BLS produces a monthly-frequency data series for jobs in the week that includes the 12th of the month.

Cajner, Tomaz, Leland Crane, Ryan Decker, Adrian Hamins-Puertolas, Christopher Kurz, and Tyler Radler (2018). "Using Payroll Processor Microdata to Measure Aggregate Labor Market Activity," Finance and Economics Discussion Series 2018-005. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2018.005.

Cleveland, William P., and Stuart Scott (2007). “Seasonal Adjustment of Weekly Time Series with Application to Unemployment Insurance Claims and Steel Production,” Journal of Official Statistics, Vol. 23, No. 2, pp. 209–221.

What is the ADP National Employment Report in collaboration with Stanford University?

• The ADP Research Institute (ADPRI) is advancing U.S. labor-market analysis by partnering with Stanford University’s Stanford Digital Economy Lab to produce new measures of private-sector employment with a focus on both jobs and pay.
• The new National Employment Report uses fine-grained, high-frequency data on jobs and pay to deliver a richer and more useful analysis of the labor market.
• Our independent indicators of U.S. employment will help answer key economic and business questions and offer insights to a broader audience.

How is the new report different from the previous National Employment Report?

The new National Employment Report is intended as an independent measure of private-sector employment. It is not intended to forecast the Bureau of Labor Statistics (BLS) non-farm payrolls report.

• ADP’s data is based on actual payroll transactions. It provides a high-frequency read of employment, as well as a monthly snapshot of employment change based on a 12th of the month reference period. By combining the job and pay data of more than 25 million workers into one high-frequency release, the new ADP report will provide a representative picture and independent measure of the U.S. labor market.
• The report presents data series for the monthly change in private employment through the most recent month and data series for the weekly change in employment through the preceding month. Historical jobs data since 2010 also are available. The report presents change in pay over the past 12 months based on a matched sample of almost 10 million employees.
• Job and pay results are broken out by industry, region, and establishment size. Pay data also is broken out by gender and age.

What are the advantages of the new ADP National Employment Report?

The new ADP National Employment Report provides high-frequency measures of employment, including jobs and pay, to provide a clearer, near real-time assessment of the labor market that can inform business leaders, researchers, and policymakers.

Why did the ADP Research Institute change the National Employment Report?

The coronavirus pandemic prompted seismic shifts in the U.S. economy and labor market, highlighting the need for access to near-real-time data for reliable measurement. ADP’s anonymized, person-level payroll data provide a comprehensive and fine-grained measure of U.S. employment, one that will deliver better insight into today’s labor market. The new NER will provide business leaders, researchers, and policymakers with a reliable read on the economy and the direction of work.

What is the release schedule for the new ADP National Employment Report?

Reports will be released monthly on the Wednesday before the BLS non-farm payrolls report, with some exceptions. A publication calendar can be found at https://adpemploymentreport.com/.

How has the methodology changed?

The NER uses ADP payroll data to provide a nationally representative measure of employment. This new approach differs from the former NER’s model-based methodology, which sought to forecast changes in the Current Employment Statistics monthly survey conducted by the Bureau of Labor Statistics. For more information, see our technical note.

How will the change in methodology affect historical data comparisons?

Job data from 2010 forward will be constructed using the new methodology and can be found in a longitudinal file available in the download historical data tabs.

Will the new National Employment Report forecast the Bureau of Labor Statistics monthly non-farm payrolls report?

No. The new measure is an independent indicator of labor-market data.

Does the wage data in this new report replace the ADP Workforce Vitality Report?

Yes. Pay data in the new report replaces the quarterly ADP Workforce Vitality Report. Future quarterly reports will expand on key areas of interest such as employment benefits and gender. To view the pay data, visit https://payinsights.adp.com/

What will happen with the Small Business Report and the National Franchise Report?

ADPRI will no longer produce the Small Business or National Franchise reports.

The new NER reports employment and pay change by establishment size. For most small employers, the establishment size is the same as the employer size. Large employers, such as big corporations, might contain more than one establishment. Employment change is broken out for the following categories:

Small establishments

• 1-19 employees
• 20-49 employees

Medium establishments

• 50-249 employees
• 250-500 employees

Large establishments

• More than 500 employees

Will ADP continue to produce the France Employment Report, and are there any changes taking place?

ADP will continue to issue the France Employment Report with no changes at this time.