ADP’s August Payrolls Data Looks Like a Shocker

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