The ADP report comes out on the first Wednesday of each month and sometimes is considered a barometer for each Friday’s unemployment report from the Labor Department. If May’s reading from ADP is really a barometer, then the non-Farm payrolls data is going to be for one massive disappointment.
ADP reported for May that the private sector created only 38,000 jobs. Dow Jones had estimates of 190,000 jobs added. This is not just bad, it is miserable and represents the worst number in about eight months. The reading from April was 179,000. Awful all the way around.
What you can now expect is that the economists in a consensus will be gearing up their weekly jobless claims data for Thursday and will be gearing down their figures for Friday’s non-Farm Payrolls data. The only good news here is that ADP is not always entirely representative of the country.
Bloomberg has Thursday’s jobless claims consensus at 420,000 versus an unrevised figure of 424,000 from a week earlier.
Bloomberg has Friday’s unemployment rate and non-Farm Payrolls and other data for May as follows:
- 8.9% unemployment versus 9.0% in April;
- Non-Farm Payrolls at 190,000 versus 244,000 in April;
- Private sector payrolls at 210,000 versus 268,000 in April;
- Average hourly earnings at +0.2% versus +0.1% in April.
Some will try to blame weakness in Japan here. The data is unfortunately coming out too weak for that to be the case. If you just graduated from college, welcome to the workforce.
JON C. OGG
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