Reclaiming Common Sense

First Week of The Month - ADP, Jobs Report, Weekly Claims 

Remarkable, Remarkable, Remarkable

The week started with the Labor Day Holiday. Last week this column produced an ADP Private Se tor Payroll Report forecast article. This week the forecast was for the August Employment Situation Report or Jobs Report.

(Sep.3) The August gust Jobs Report, or Employment Situation Report, forecast article was written after looking at the potential for the August ADP Private Sector Payroll report. There were concerns expressed about the potential for a low month to month growth rate for the Current Employment Statistics (CES) worker data. There was also concern that this would be a battle of two data sets with the Current Population Survey (CPS) jobs and unemployment data. It was thought that the CES data would be fairly strong, even if it slowed a little, and the CPS data would show its normal annual weakness, except for unemployment level, which would drop, showing strength. "August Jobs Report Forecast: Looking Up" also discussed other metrics, including the multiple job holder data.

(Sep. 5) The monthly ADP Payroll report was delayed one day by the Labor Day holiday. Thursday morning included the release of the ADP report at 8:15 AM followed by the Weekly Unemployment Claims data at 8:30 AM. The month to month growth rate was slightly higher than expected, which in turn boosted the annual growth rate. "August ADP: Remarkable" examined the sector data and the total payroll number. The net growth was 195,000 payroll positions. This did not include government positions.

(Sep. 5)  The weekly unemployment claims report includes information on the first-time claims data, the continuing claims data, and the insured unemployment rate.  The media has been actively ignoring this report. Did you know that this was the sixteenth week with the first-time unemployment claims data recorded under 200,000 claims, non-seasonally adjusted?

(Sep. 6)  The expectations for the August Jobs Report were bolstered after the release of the ADP report. It would be an understatement to say that the workers data, the headline data, was weaker than expected and that the Jobs and Unemployment data was better than expected. We have had the "Tale of Two Data Sets" all year long. September is one of the main months that the "jobs" data is seasonally adjusted. January and September are normally terrible months for the CES worker data, non-seasonally adjusted. February can be huge, borderline unbelievable. "August Jobs Report Reveals Record August Jobs Level" references the CPS jobs data. August was simultaneously one of the weakest September CES worker months since 1979, and one of the better CPS jobs and unemployment months since 1979. We have the best August Unemployment Rates since 1969, and a higher participation rate than we have had since August of 2013.

This week we received confirmation that the economy is still in expansion mode and not in a recession. "All" recessions are jobs recessions, CPS jobs.  We have 2.2 million more full-time jobs and 96,000 more part-time jobs than we did during August of 2018.  We had the lowest Insured unemployment rate for the fifth week of August ever. We will receive the July JOLTS Job Opening and Labor Turnover Survey this upcoming week. Comparisons will be made between the JOLTS data and the CES data. They might as well compare the JOLTS data to the weekly continuing claims data. In other words, you cannot compare different data sets with different seasonal factors, which measure different things.

It's the Economy.​