Best Financial Markets Analysis Article The ADP National Employment Report is a private sector estimate of payroll employment published two days prior to the official report of the Bureau of Labor Statistics each month and it garners a great deal of market attention although it is not official data about employment.

The June ADP survey shows an increase in private sector payrolls of 157,000. The official numbers will be published on July 8. However, it is important to note that total payrolls are made up of both government and private sector payrolls.

Government jobs (federal, state, and local) account for roughly 16% of total employment of the United States. Government employment dropped 3.6% on a year-to-year basis in May, which is the largest drop during the post-war period (see Chart 2).

As the economy has recovered over the past eight quarters, private sector employment has risen roughly 1.0% above the low seen at the end of the recession (June 2009, see Chart 3). However, government payrolls have dropped almost 2.0% from the level registered in June 2009 (see Chart 3) or a sum of 430,000 government jobs have been lost since the recovery commenced. Chart 3 is an index chart where the level of employment in June 2009, when the recession ended, is set equal to 100. Strong gains in hiring in the private and government sectors are essential for a complete and meaningful recovery. Stay tuned for tomorrow's analysis of employment data for June 2011.

Asha Bangalore — Senior Vice President and Economist

http://www.northerntrust.com

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

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