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ADP Workforce Vitality Index up 4% in Q2

July 15, 2015

The ADP Workforce Vitality Index, a measure of the total wages paid to the US private-sector workforce, rose 4.1% year over year to a level of 108 (3Q2013=100, not seasonally adjusted) in the second quarter of 2015.

The quarterly report analyzes the overall vitality of the US labor market based on data that identifies labor market trends and dynamics across multiple dimensions including employment growth, job turnover, wage growth and hours worked. Movement in the index depends on the contributions of wages and hours of workers who have remained in the same jobs from the previous quarter, the wages and hours of workers who switched jobs during the quarter, and employment changes.

The employment portion of the index rose 2.5% year over year.

Growth in the index varied across age groups, but was similar at the two ends of the age range. The reasons for these increases differ between the groups, according to ADP.

“This quarter’s Workforce Vitality Index gives us an interesting look at how labor market forces are affecting workers at the extreme ends of the age spectrum,” said Ahu Yildirmaz, VP and head of the ADP Research Institute. “Both the youngest and oldest workers are experiencing solid growth as measured by the index, but for very different reasons. For one it’s better wages. For the other it’s delaying their exit from the workforce.”

Smaller firms experienced the strongest growth in the workforce vitality index, primarily because of employment growth. Wage growth has been fairly consistent across firm sizes, ranging generally between 2% and 3%.

The ADP Workforce Vitality Report was developed by the ADP Research Institute in collaboration with Moody’s Analytics.