Automatic Data Processing Inc. (NASDAQ: ADP) has stunned the markets with its projected private payrolls gains this morning. The number is meant to preempt the official Labor Department’s report on the employment situation due tomorrow at 8:30 a.m. EST. If this acts as a true harbinger, then the expectations for nonfarm and private payrolls will be adjusted upward for tomorrow’s big number.

ADP is projecting that some 201,000 jobs were added to the payrolls in the month of August. Why this is such a shock is that Bloomberg was only calling for about 140,000 jobs created. We also saw a slight revision higher for July to 173,000.

This will make the weekly jobless claims that much more important. Tomorrow’s big jobs expectations by Bloomberg are as follows:

• Nonfarm payrolls 125,000, with a range of 70,000 to 177,000
• Private payrolls 134,00, with a range of 80,000 to 177,000
• Unemployment expected to be flat at 8.3%, with a range of 8.2% to 8.4%

What you need to expect is simple. The market now likely will ratchet up its expectations slightly. That 8.3% unemployment range is now probably a coin toss between 8.2% and 8.3%, and the nonfarm payrolls and private sector expectations will be adjusted higher by 20,000 or 30,000.

There is a caveat here as well. ADP is indicated as a prediction tool, but sometimes it is not representative of the broad economic report.

JON C. OGG

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