Source: Bloomberg

Professional and business service employment dominated the ADP release today (70,000 jobs out of 158,000). A good deal of the “services” are outsourcing of corporate jobs. In fact, outsourcing companies are the hottest current item in the venture capital universe.

I observe that YOY employment growth among the S&P 1500 has fallen to zero after rising to a peak of 30% in mid-2014. Large companies dominated employment growth and now have stopped hiring. It’s interesting that hours worked surged along with large-company hiring and fell as the large companies stopped hiring.

This suggests that new employment growth is tilted towards jobs with fewer hours and lower compensation. I conjecture that many of these jobs replace steadier, higher-paid corporate jobs with longer hours. That would be a structural change associated with cost-cutting technologies. It’s a possible explanation for the sharp discrepancy between the Atlanta Fed’s calculation of higher pay for the same job over time and the weak overall earnings numbers.