Thursday, October 1, 2015

ADP Employment Used To Predict Useless Labor Report

ADP data, a time series that displays a low correlation to nonfarm payroll numbers, receives a fair amount of headline attention either because the Wednesdays before the labor report are slow or somebody believe's it's helps anticipate the direction and strength of the labor report. Since nonfarm payrolls, a highly revised, changed - lack of consistency over time, and economically lagging time series, is a poor predictor of future economic activity, it suggests that Wednesdays must be slow.

Labor conditions are already deteriorating (chart). The majority doesn't recognize it because they're distracted by more important things such as Trump's zingers.


Headline: ADP: Businesses added 200,000 jobs in September

The private sector added 200,000 jobs in September, payroll processor ADP said Wednesday, in a possible sign that the government will report that employment growth rebounded after slowing the previous month.



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