Carlos A. Rodriguez, president and chief executive officer of ADP, said, “Today marks the first ADP National Employment Report with Moody’s Analytics as our partner. Our new format leverages ADP’s unique client data in a more robust way to provide greater insights on employment in the United States.”The market typically reacts to the count in the ADP report even though it does not often mesh with the government's monthly job report. That report will be released Friday by the Bureau of Labor Statistics. Consensus of analysts surveyed by Bloomberg puts the BLS gain at 125,000.
ADP's new methodology, the firm said in a release last week, should bring its calculations closer to those of the BLS. In September, the bureau, which counts new hires in both the private and government sectors, said 114,000 new jobs were created.
Using the previous methodology, over the past six months, ADP had reported creation each month of anywhere from 15,000 to 98,000 more jobs than the BLS. The bureau has revised each of its monthly figures upward, sometimes significantly, while ADP has typically revised its figure downward, moving the two revised reports closer to each other. Under the new methodology the numbers over the past six months in the two reports should be much more in sync with each other when first announced, according to the ADP and its partner.
According to a calculator housed on the website of the Federal Reserve Bank of Atlanta, the economy must generate about 100,000 jobs a month just to keep up with monthly additions to the working-age population and maintain the unemployment rate at its current level.
ADP bases its report on the payrolls it processes for some 406,000 businesses covering about 23 million employees. BLS bases its report on its Current Employment Statistics survey of 410,000 worksites and on the Current Population Survey of 60,000 households.
Over the past six months ending in September, the BLS has reported 637,000 new seasonally adjusted private-sector jobs have been created, with 16,000 lay-offs in the public sector. The ADP, on the other hand, with the new methodology reports and increase of 668,000 new private-sector jobs, also seasonally adjusted.
When all the arithmetic is done, assuming the announced benchmark revision turns out to be correct, the BLS has counted 164,000 more private jobs than the ADP has over the past year and a half. Friday, we'll learn whether the latest ADP and BLS calculations have moved that gap closer together or farther apart. What the difference tells us, however big or small, is that counting the number of new jobs and applying seasonal adjustment and other formulas to them is part art, part science. And zero conspiracy.
Meanwhile, the Department of Labor reported that seasonally adjusted first-time claims for jobless benefits for the week ending Oct. 27 fell to 363,000 from a revised 372,000 the previous week. For the comparable week of 2011, there were 398,000 first-time claims.
For all programs, federal and state, the total number of people claiming benefits for the week ending Oct. 13 was 5,035,367. That's an increase of 112,147 from the previous week. For the comparable week in 2011, 6,783,614 persons claimed benefits in all programs.