Briefly:
Figure 1: Change since January 2025 in private nonfarm payroll employment, BLS official (blue), implied preliminary benchmark BLS private NFP (brown), and ADP private NFP (green), all in 000’s, s.a. Source: BLS, ADP via FRED, BLS, and author’s calculations.
To place things in perspective, here is the ADP series against some alternative business cycle indicators (for those followed by NBER’s Business Cycle Dating Committeee, see this post).
Figure 2: Implied Nonfarm Payroll early benchmark (NFP) (bold blue), civilian employment adjusted to NFP concept, smoothed population controls and 3 month centered moving average (bold orange), manufacturing production (red), consumption in Ch.2017$ (teal), real retail sales (black), freight services index (brown), and coincident index in Ch.2017$ (pink), GDO (blue bars), all log normalized to 2025M01=0. Source: Philadelphia Fed [1], Philadelphia Fed [2], Federal Reserve, BTS via FRED, BEA 2025Q3 initial release, and author’s calculations.
Since January, aggregate output measures have risen more than employment measures, which have generally trended sideways.
On the other hand, the large firm/small firm employment divergence was held in abeyance in December (prel.) numbers:
Figure 3: Cumulative change since 2025M04 in employment in firms with employment > 500 (tan), employment 1-499 (blue), in 000’s, s.a. Source: ADP, and author’s calculations.
This occurred in July, but only for a month, so one would want to see more observations to see whether the convergence was established.
Finally, manufacturing continues its downward trend insofor as the ADP series is concerned:
Figure 4: Change since 2025M01 in manufacturing employment from BLS (blue), from implied preliminary benchmark (brown), in Powell conjecture prorated applied to implied preliminary benchmark (green), QCEW covered manufacturing seasonally adjusted using X-13 (in logs) by author (purple), and ADP (red), all in 000’s, s.a. Source: BLS via FRED, BLS, ADP, and author’s calculations.
ADP manufacturing is essentially where it was in January. QCEW measures (from a census, not a survey) is decidedly below by June. While gross manufacturing output is above January levels (see Figure 2 above), it’s now below September peak. Where’s that tariff-induced manufacturing renaissance we were promised?
The narrowing in the small/large hiring gap in December may be holiday hiring. If so, then it’ll reverse in January.
The narrowing of the gap in pay increases between job switchers and job stayers in ADP’s data also turned aroind in December. This is a 12-month series, so it’s hard to know what caused it, or whether the turn is likely to persist.
Small firm hiring and an increase in the pay differential for stayers and leavers are both healthy signs, if they persist. Neither is consistent with the slowing trend in overall hiring.
It went away as the dollar fell ~ 10% in 2025…
Off topic – There are two related stories coming out of Venezuela. One is that the government has stepped up repressive action against the public in order to prevent regime change:
https://www.economist.com/the-americas/2026/01/06/the-venezuelan-regime-is-rapidly-consolidating-its-grip-on-power
The other is that the streets of Caracas have fallen into the hands of gangs, factions and guerrilla groups:
https://www.independent.co.uk/news/world/americas/venezeula-trump-maduro-machado-election-b2895251.html#Echobox=1767780461
One element in the crack-down story is that the regime is after anyone who shows any connection to the U.S. or the kidnapping. Checking social media on phones at traffic stops.
These two stories fit together nicely, except for the headline mention of “consolidation”. Sure, the regime is attempting to hold on to power, but that’s in the face of a fragmentation of power along ‘failed state” lines. Hello, Haiti.
Anyhow, Venezuela is less stable after the kidnapping, and not in a way that makes investment more likely. Nor democracy, if anyone cares.
Anyone remember that before the second Iraq war, Iraq helped to keep Iran in check? Bush had his little “mission accomplished” manhood display, and then Iran got a hold on Iraqi politics and breathing room elsewhere in the region. Unlike Haiti, like Iraq, Venezuela has land borders with its neighbors, and those borders are porous.
Venezuela is in a rough neighborhood, and is teaming with bad guys. Maduro kept the bad guys in check, like how the Mafia kept street crime down in U.S. cities back in the old days. Not saying something better us impossible. Rather, undoing things without putting some better arrangement in place is stupidly irresponsible.
A blast from my high school days, but somehow it seems appropriate: https://www.youtube.com/watch?v=B0TQfpyYO38&list=RDB0TQfpyYO38&start_radio=1
Way off topic, and I apologize – A woman was shot to death by ICE agents in Wisconsin today. ICE Barbie said the woman was a terrorist, not because she had any intention to cause fear, but because, said ICE Barbie, the woman endangered the lives of ICE agents. It is pretty obvious from the video tape that any danger to ICE agents, and there didn’t seem to be much, was the result of their own actions.
The felon-in-chief then bleated that the dead woman was a left-wing radical. There is no evidence of the dead woman’s political affiliation.
Not for the first time, let me recommend Harry Frankfurt’s wonderful little book:
https://archive.org/details/onbullshit00fran
Here’s what the Code ofFederal Regulations has to say about conditions under which deadly force may be used:
https://www.law.cornell.edu/cfr/text/10/1047.7
Mostly, somebody’s life has to in danger. Deadly force is not justified merely to apprehend someone who resists or flees, nor to enforce an order. A killing by a law enforcement officer without legal justification is a crime – murder or manslaughter.
Why flood the streets of cities governed by Democrats with poorly trained, trigger-happy ICE agents? One reason is to normalize the presence of those agents, normalize their presence for those agents, for the courts, for localelected officials and for residents. On election day, you simply tell ICE agents to go to polling places because illegal immigrants are likely to show up their. Go get ’em. Some agents will see such an order as suspicious, but follow it anyway. Some will take the order at face value and follow it. Some will see the order for what it is and happily discourage “the wrong kind of people” from voting. Republican officials are mostly OK with that. Have been since Nixon.
texas has been conducting voter intimidation for years. I am a firm believer that in theory, texas is a purple state, with plenty of blue support. however, the governor and other state leaders conduct voter intimidation efforts on a large scale, especially in the larger urban areas. they either suppress the vote with limited voter access points. or they outright post intimidators at voting sites, which is against the law but never enforced, because abbott runs the department of justice here. and if you think this is only a texas problem, you are wrong. you could have several house seats and potentially a senate seat turn blue if voter suppression was not so severe here. trump would probably not control the legislature if texas were a free state. and this behavior in texas is now normalized, as in “what do you mean I can’t march around the voting station with my rifle and handgun exposed, that’s my legal right!”
Trump America terrorists are a national security problem.
Get declared a terrorist or a domestic terrorist organization and DoW or CIA drones can bomb you in Cleveland.
By the way, Friday brings both BLS jobs data for December and maybe a Supreme Court ruling on IEEPA tariffs. Aside from a yes-or-no ruling on the legality of those tariffs, we may hear about refunding tariff payments. It’s nuts that illegal tariff payments might not be refunded, but during oral arguments Justice “I like beer and rape” Kavanaugh seemed to suggest repaying money taken illegally is a bad idea because it would cost the government money.
Off topic – apart from killing and kidnapping and oil piracy, the felon-in-chief administration has a few ideas. They include banning institutional investors from buying single-family homes::
https://finance.yahoo.com/news/blackstone-stock-sinks-after-trump-plans-steps-to-ban-institutional-investors-from-buying-single-family-homes-184525826.html
This is clearly meant as “doing something” about the cost of living. I am prompted to ask what Blackrock did to make the felon mad.
Another cool idea is increasing the military budget to $1.5 trillion per year from the $900 billion budgeted for this fiscal year:
https://www.ctvnews.ca/world/article/trump-proposes-massive-increase-in-2027-defence-spending-to-us15t-citing-dangerous-times/
Off course, that plan to boost military spending is in support of killing and kidnapping and oil piracy. A vote in Congress for that increase is a vote for killing and kidnapping and oil piracy, and for a further increase in the federal budget deficit. It’s a sure thing that Republicans will naturally use any increase in the killing, kidnapping and oil piracy budget as an excuse to cut spending in the rest of the budget.
Stock traders have noticed:
https://www.marketwatch.com/story/defense-stocks-rebound-after-trump-follows-criticism-with-pledge-to-lift-military-budget-by-50-819b20ab
I’m still curious why the felon-in-chief, with so many “ideas”, hasn’t gotten around to dealing with the Social Security budget problem that arrives in less than a decade.