Kevin Spires, CFA, FRM
The ADP Employment Report was released at 8:15 am EST today. According to ADP, 133k new private sector jobs were created in May vs. a consensus of 154k jobs.
The ADP report is the single best employment indicator for understanding how many jobs were added in the past month - even better than the governments own release set for this Friday. The ADP report is built from ADP's count of actual payroll checks to employees in the ADP system. The government's report is based off of a survey of employers - a survey that relies on thousands of individuals to manually enter data into a governement online form. (For full disclosure, my wife's small business is a payroll survey respondent).
When the monthly payroll report is released, I view the ADP report as the true count and the government's report as an estimate. Later, as employers file actual payroll tax data on a quarterly basis, the government's count then becomes a better, more complete count as the government slowly replaces the survey results with actual payroll counts based on tax data - mainly with the annual benchmark revisions.
The ADP report is the single best employment indicator for understanding how many jobs were added in the past month - even better than the governments own release set for this Friday. The ADP report is built from ADP's count of actual payroll checks to employees in the ADP system. The government's report is based off of a survey of employers - a survey that relies on thousands of individuals to manually enter data into a governement online form. (For full disclosure, my wife's small business is a payroll survey respondent).
When the monthly payroll report is released, I view the ADP report as the true count and the government's report as an estimate. Later, as employers file actual payroll tax data on a quarterly basis, the government's count then becomes a better, more complete count as the government slowly replaces the survey results with actual payroll counts based on tax data - mainly with the annual benchmark revisions.
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