Exceeding Expectations – ADP Payrolls Increase 749,000 in September – Matches Ground Activity…


The ADP private sector payroll report [link here] reflects continued rapid recovery from the regional COVID-19 shutdowns. The monthly report shows gains of 749,000 jobs, exceeding the expected 650,000 forecast.

One of the key factors is the expiration of the disincentive via the federal COVID unemployment mechanism that provided an additional $600/month beyond normal earnings in the unemployment package. This has been a topic of many coversations in my travels as working-class businesses have been having a hard time getting people to return to work.  (more on that below)

(Reuters) Private payrolls increased by 749,000 jobs this month after rising 481,000 in August, the ADP National Employment Report showed. Economists polled by Reuters had forecast private payrolls would rise by 650,000 in September. Employment gains were spread across all industries and company size.

Manufacturing payrolls increased by 130,000 jobs and employment at construction sites rose 60,000. Hiring in the services industries advanced 552,000, with trade, transportation and utilities leading the gains. (more)

As many of you know I have been traveling extensively throughout the country as I continue to brief groups on background DC, DOJ and FBI information from my years of research.  During these travels I make a point to visit sector-specific businesses to inquire about their economic and business growth status.

The disconnect amid a ground reality compared to business reporting and financial media is actually stunning.  However, perhaps that is because my physical ‘on-the-ground’ inquires and reports are ahead of the natural lag in the economic data rolling up to the accounting level.  Here’s what I can tell you with absolute certainty.

The amount of heavy equipment, industrial equipment, hardware and goods being moved around the country is more than I have ever witnessed or seen in decades of travel.  The mid-west, mid-atlantic, southeast, and more specifically the south in general, has more haulers and semi-trucks on the road than I have ever witnessed…. ever…. by a substantial margin.  The same is true for rail freight and cargo vessels.

Because the scale of goods transportation is so visibly larger, it caused me to revisit a much earlier proposal by President Trump on U.S. infrastructure to see if this was actually a foreseeable scenario. I think it was…. I think the reversal of the proverbial “rust” from our economic rust-belt a predictable domestic economic restoration, and that goes to the need of the infrastructure program that President Trump was speaking about before the COVID contraction.

Regardless of what financial pundits and economic media might be saying, the underlying economic activity in the U.S. right now is explosive and moving at a much more rapid pace than before the COVID crisis.  Regionally, business owners and operators all report the same thing, and the same need for a larger workforce.  All of them are hiring; however, some sector specifics and regional specifics are much more intense.

The demand on the transportation sector for truck drivers must be intense just based on the sheer volume of equipment visibly being moved around the nation. Perhaps this is party due to an exodus from urban areas (that is obvious); and perhaps this is due to the opportunities now that COVID shutdowns are ending and there are major populations relocating outside the metropolitan regions.

When populations shift, all the ancillary businesses related to the stuff they need also shift and expand.   Combine this with the expansion in domestic manufacturing due to trade deals starting to come on-line, specifically the USMCA, and I believe this is a large part of what is currently visible.  Believe me… it’s very real, and quite jaw-dropping to witness.

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