1Q26_ Quarterly Outlook Report_Final_EN - Flipbook - Page 60
T H E P LUMB LI N E | A RETU RN TO F I RS T PRI N CI PL ES
attention. Although the initial prints from the ADP employment report have historically had a
poor track record in predicting nonfarm payrolls numbers on a month-to-month basis, the
general trend between the two indicators becomes aligned with revisions. Recent months of data
are pointing to a weaker labour market.
Despite month-to-month discrepancies, the ADP employment report’s trend has been
aligned with government data
Net employment chg (000s)
1000
800
600
400
200
0
-200
2022
2023
2024
Nonfarm payrolls
ADP employment chg
2025
Source: Bureau of Labor Statistics, ADP, Bloomberg Finance LP, Scotia Wealth Management
That said, the underlying drivers in the ADP report differed considerably from official data. The
former, which only measures private payrolls, showed a minor net increase in private payrolls of
15k for the two month period ended November, whereas the latter showed a rise of 121k that was
ultimately offset by a cumulative 162k decline in public sector employment, most of which
occurred in October as employees who took deferred resignation offers earlier in the year
dropped out of the sample. The headline nonfarm payrolls figure between October and
November showed a net 41k decline during the period, while private sector breadth remained
poor as much of the year-to-date hiring took place in education and healthcare.
The distribution of job gains across the private sector has been weak in 2025
Education & health
692
Total
610
Leisure & hospitality
115
Other
53
Construction
43
Trade, transport, utilities
26
Finance
25
Mining /logging
-16
Info
-29
Manufacturing
-63
Professional & business
Government
-80
Net employment chg (000s, 2025 YTD through
-156
Source: Bureau of Labor Statistics, Bloomberg Finance LP, Scotia Wealth Management
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