{"id":348738,"date":"2025-10-03T18:43:41","date_gmt":"2025-10-03T23:43:41","guid":{"rendered":"https:\/\/michigandigitalnews.com\/index.php\/2025\/10\/03\/business-cycle-implications-from-the-adp-release\/"},"modified":"2025-10-03T18:43:41","modified_gmt":"2025-10-03T23:43:41","slug":"business-cycle-implications-from-the-adp-release","status":"publish","type":"post","link":"https:\/\/michigandigitalnews.com\/index.php\/2025\/10\/03\/business-cycle-implications-from-the-adp-release\/","title":{"rendered":"Business Cycle Implications from the ADP Release"},"content":{"rendered":"

[ad_1]
\n<\/p>\n


\n\t\t\t\t
\n <\/p>\n
\n

My nowcast of BLS private nonfarm payroll employment was for a decreaes of 78K<\/a>, but with a very wide prediction interval. This is an aggregate number; however, we can infer certain trends from the disaggregate (by firm size) numbers from ADP.<\/p>\n

The financial accelerator approach (e.g., BBG, 1996<\/a>)implies that smaller firms (with less collateral) will evidence a slowdown sooner than larger firms. Using the 500 employee cutoff, can we see the differential trends in the data?<\/p>\n

\"\"<\/a><\/p>\n

Figure 1:<\/strong> Change in employment from May 2025 in firms with less than 500 employees (blue), in firms with 500 and more employees (tan), both in 000\u2019s, s.a. Source: ADP via FRED, and author\u2019s calculations.\u00a0<\/em><\/p>\n

\u00a0<\/p>\n

\"\"<\/a><\/p>\n

Figure 2:<\/strong> Employment in firms with less than 500 employees (blue), in firms with 500 and more employees (tan), in logs 2025M05=0. Source: ADP via FRED, and author\u2019s calculations.\u00a0<\/em><\/p>\n

Private employment in firms with 1-499 employees constitutes about 80% of employment.<\/p>\n

Seen either way, employment growth has essentially disappeared for \u201csmall\u201d firms.<\/p>\n<\/p><\/div>\n


\n\t\t <\/p>\n