Payrolls and unemployment payments point to resilience

Summary

• Bank of America deposit account data confirms a moderating but resilient trend in payroll growth.
• Payroll growth eased in October to a robust 1.2% year-over-year, remaining directionally consistent with a resilient labor market despite peaking over the summer months.
• The number of households receiving unemployment payments dropped approximately 5% year-over-year in October.
• September data shows strong growth in payments from small and mid-sized firms to hiring firms, suggesting continued hiring plans.
• Bank of America payroll estimates use a three-month moving average percentage year-over-year, while BLS and ADP data are monthly and seasonally adjusted.
• Unemployment payment data from Bank of America is not seasonally adjusted, whereas BLS Continuing Claims data is seasonally adjusted.
• The report methodology relies on aggregated and anonymized transaction data from US Retail, Preferred, Small Business, and Wealth Management clients.
• Small businesses in the report are defined as clients with under $5mm in annual sales revenue, while mid-sized businesses are defined as having $5mm-$50mm in annual sales revenue.
• Household income terciles are determined by quantitative estimates and periodically re-assessed based on factors like wage inflation and social security payments.
• Bonus growth estimates are derived by identifying payroll transactions over 50% higher than the median regular payroll payments received by customers around the same time in the last two years.
• The alternative hiring indicator consists of payments from business clients to business-focused hiring firms via Automated Clearing House, credit cards, or debit cards.
• Views and opinions expressed are solely those of Bank of America Institute and are not the product of the BofA Global Research department.