Kevin Spires, CFA, FRM
The ADP Employment report was released earlier this morning and according to ADP, 163k private sector jobs were added in July versus 172k jobs added in June.
The ADP report is the single best predictor of the number of jobs to be reported by the government on Friday with a 92.5% correlation over the past 10 years. The main difference between the Jobs Report released by the government and the report released by ADP is the additional count of government jobs by the government.
I strongly believe that the ADP report is a better report. Their number is based on a count of actual payroll jobs that are processed through their system. The government report is based initially on a survey that requires thousands of employers to self report their payroll numbers. (Disclosure: My wife's small business is a payroll survey respondent). The government slowly revises the payroll count as it receives actual payroll tax data and it's count becomes better, but only with long lags.
Based on the ADP report, I would expect 150-175k total additions to payrolls to be reported by the Jobs Report on Friday, but anything 100k either side of that range shouldn't be a surprise. The seasonals seem to be favoring greater job growth, with fewer auto manufacturing layoffs, but you can never discount the effect that the European Crisis and the looming fiscal cliff might have had on
The ADP report is the single best predictor of the number of jobs to be reported by the government on Friday with a 92.5% correlation over the past 10 years. The main difference between the Jobs Report released by the government and the report released by ADP is the additional count of government jobs by the government.
I strongly believe that the ADP report is a better report. Their number is based on a count of actual payroll jobs that are processed through their system. The government report is based initially on a survey that requires thousands of employers to self report their payroll numbers. (Disclosure: My wife's small business is a payroll survey respondent). The government slowly revises the payroll count as it receives actual payroll tax data and it's count becomes better, but only with long lags.
Based on the ADP report, I would expect 150-175k total additions to payrolls to be reported by the Jobs Report on Friday, but anything 100k either side of that range shouldn't be a surprise. The seasonals seem to be favoring greater job growth, with fewer auto manufacturing layoffs, but you can never discount the effect that the European Crisis and the looming fiscal cliff might have had on
RSS Feed
