Reclaiming Common Sense

The data indicates that we should see growth in almost every sector. The data shows fairly consistent trends in the seasonally adjusted data. The Natural Resources Sector (Mining and Logging) could go either way - a slight increase or a slight decrease. Manufacturing has been expanding, so a contraction of 57,000 jobs would be unlikely.

We have seen the most expansion in three sectors. The Education and Health Services (EHS) Sector, The Leisure and Hospitality Sector, and the Trade, Transportation, Utility(TTU) sector have been growing the fastest after the recession. Will we see a spike in the Professional Business Service (PBS) sector this month? Will we see any growth in the IT sector? Will we see a spike in the "Other Services" sector?

We could see a number from ADP between 173,000 (the average of the 26,000 and 320,000) and 200,000 (excluding the lost in the manufacturing Sector.)  We could see a seriously strong number of 300,000 or more. It all hangs on the seasonal factors, that are unknown, and the growth rate. As with the Employment Situation data, it also depends on the revisions to the prior data. If the data from August is revised down 20,000 jobs then this month with get a "boost of 20,000." The opposite is true. Expect good news and remember that this number is the private sector equivalent and not the "non-farm payroll" number.

It's the economy.

The Monthly ADP Jobs Report is released the Wednesday before the Friday Employment Situation Report, or Jobs Report, from the Department of Labor. This website has produced a number of articles on the relationship between the ADP Private Sector data and the Current Employment Statistics Worker Data. There are many problems:

  • The sample sizes of the Current Population Survey, which measures full-time and part-time jobs, the Current Employment Statistics data, which measures workers, and the ADP  data are significantly different, with the ADP data sample being the largest;
  • The seasonal factors for the various databases vary month to month, and year to year;
  • The seasonal factors for the ADP data are not available. The seasonally adjusted CES and CPS data, as well as the non-seasonally adjusted CES and CPS data, are available. The seasonal factors can be calculated.

That said, the ADP data normally gives a good forecast of what to expect - sort of like the weather. We should know whether or not the Employment Situation Report forecast is hot or cold based on the ADP data.