There was a big hoopla this week when the ADP numbers were released showing massive employment gains. Those gains ended up being nonexistent in the figures released by the government two days later. Who do you trust? Can you trust either? Normally, I'd tend to trust more a private organization that reports real numbers, but it turrns out that is not the case at all. Both entities estimate numbers and both make seasonal adjustments, and neither can be perfect.
Bloomberg has an article on this today. It reports economists from JPMorgan Chase & Co.’s and Goldman Sachs Group warning to beware of December
“I don’t think ADP has been particularly useful in forecasting” the government’s employment figures, Feroli (JPM) said in a telephone interview from his New York office. “ADP has historically had problems in December because of a variety of technical reasons.”
They talk about the "purge effect", when employees sometimes remain on company records until December, regardless of when they are dismissed or quit, when businesses update, or purge, their figures with ADP. "The Roseland, New Jersey-based paycheck processor estimates this change when adjusting its data for seasonal changes and the company’s projection may have been too large this year because there were fewer firings than in previous years, economists said".
The Labor Department said that 113,000 workers were added to payroll last month. This was 184,000 fewer than ADP predicted - just two days earlier. According to Bloomberg, this is the largest ever gap ADP has had on an initial private payroll forecast for December and it was a ‘Big Miss’.
Why it matters so much? "ADP’s December estimate of 297,000 prompted 22 economists, including forecasters at Morgan Stanley and Deutsche Bank Securities Inc. in New York, to raise their forecasts".
Saturday, January 8, 2011
ADP's Huge Miss Employment Numbers Versus Government Numbers, Can You Trust Either?
Subscribe to:
Post Comments (Atom)
Blog Archive
-
▼
2011
(510)
-
▼
January
(45)
- Centamin Egypt: A Gold Producer in Egypt at Bargai...
- Chinese Agency Blasts Fed for "Eroding Ligitimacy ...
- A Trader Made $5B in Profits in 2010
- Petrobras Makes Yet New Oil Discovery
- Brazilian Unemployment: 5.3%, Lowest Ever
- New ETF for Jobless Claims
- S&P Cuts Japan's Rating: Yen Plunges
- $1 Trillion To Pour Into Emerging Markets in 2011:...
- The Two Europes: Resentment Grows Against Germany ...
- Natural Gas Prices Soar, Contango Now Benefits UNG
- Fed's Plosser: Monetary Policy Cannot Fix Unemploy...
- Looking For The Best ETFs? Brazil Boom To Continue...
- Commodities: Wheat Near Record Prices Again; Food ...
- China Steps Up Bad Mouthing of U.S. Dollar; Target...
- Why Overall U.S. Consumer Spending Has Not Collaps...
- Meredith Whitney: Beware Muni Bonds, Wave of Defau...
- Fitch Downgrades Greece to Junk Status
- Weeping in a BMW: China Pushes Consumption; Move O...
- Inflation Jumps in The U.K., Calling for Raise in ...
- Forget Peak Gold Theories: Global Gold Production ...
- Brazil, India, and China Account for 50% of World'...
- Brazil Created Over 2.5M Jobs in 2010, Will Create...
- Citi Says European Bailout Fund Needs to Be Increa...
- U.S. Banks Are Reporting Phantom $1.4T on Interest...
- Fed Buying $112B in Treasuries By February 9th
- Home Prices Drop More Than During Great Depression...
- So You Thought The Troubles Were Over: Why Markets...
- Roubini Versus Goldman Sachs, Who is Right?
- ECB's Issing: Euro's Existence Threatened; Crisis ...
- Brazil Says Currency Wars Are Now Turning Into Tra...
- Invest Wisely Where The Growth Is: World's Current...
- ADP's Huge Miss Employment Numbers Versus Governme...
- Brazilian Inflation Is The Highest in 6 Years
- Threats: Geithner Warns That U.S. Could Hit Legal ...
- Currency Wars: Brazil Fires New Salvo To Stop Drop...
- It's Sleek, It's Fast, Powerful, and Super Thin: N...
- World's Food Prices Surge To New Record Highs - Again
- Shell and Brazil's Cosan to Sell Ethanol Worldwide
- Natural Gas Shoots Higher: HNU to Jump Today; Cont...
- Currency Wars Continue: Chile Strikes Back and Buy...
- Brazil's Automobile Industry Hits New Record: 3.3M...
- Bank of America is Worried: Buys Embarassing Web S...
- PBR Jumps; Performance That Cannot Be Matched; Pre...
- China To Buy Spain's Debt to Stop European Crisis
- The Rise of The Chinese Yuan: Hits Record High; To...
-
▼
January
(45)
No comments:
Post a Comment