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Jobs

ADP Jobs… A Question of Calculation Methodology

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By Douglas A. McIntyre Updated Published
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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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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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