ADP is out with its controversial jobs number this morning ahead of this week’s unemployment report. ADP said that there was “only” a -491,000 drop of jobs in the US private sector. The expectation was somewhere north of -600,000. This has turned equity futures around and into positive territory. Before you hang your hat and think that the same data will be shown from the Labor Department this week, this number has been extremely volatile and is thought of by many (including us) as an outlying number that fails to grasp the full picture in the economy.
To show how different this is from the rest of the estimates and the real economy, Bloomberg has a consensus estimate for this Friday’s jobs data from the Labor Department as being -630,000. Again, these numbers between ADP trying to front-run the Labor Data has been grossly different on many occasions. And the opinion of “why” ranges from outright discrepancies to a narrower pool of data.
This ADP number also flies in the face of the recent weekly jobless claims data. Even though those have come in the severity, the drops have still been north of 600,000 per week.
Futures have actually gone positive on this data with the hope that a turn in employment or at least a cessation in the magnitude of the drops is close.
This change may be easy to explain since ADP has a smaller swatch compared to the Labor Department. But there is still this nagging question of just how the data calculations from ADP in each report seems to be so different than other official numbers.
Jon C. Ogg
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