INDICATOR: September ADP Employment Estimates
KEY DATA: ADP: 162,000; Small businesses: 81,000; Medium businesses: 64,000; Large businesses: 17,000
IN A NUTSHELL: “Private-sector firms keep putting more workers on the automated payrolls, even if the government cannot seem to find them.”
WHAT IT MEANS: ADP is, in part, a payroll-servicing company that firms use to pay people and taxes automatically. It seems that its clients are in a hiring mood.
The company’s estimates of September private-sector job growth was decent and in line with what the firm thought was occurring all through the summer.
As usual, small and mid-sized businesses did the yeomen work, but there has been a steady improvement in large corporate hiring, as well. This is a good sign that the recovery is continuing and forcing all types of firms to add workers.
In a separate report, new mortgage applications surged last week by 16.6 percent, led by a jump in refinancings. There was also a solid rise in new mortgage requests, reinforcing the view that the housing market is beginning to pick up steam.
MARKETS AND FED POLICY IMPLICATIONS: Recently, data from the Bureau of Labor Statistics (BLS) haven’t matched the ADP estimates, but we did get a major revision to the official data recently. There were almost 400,000 more workers on the payrolls in March than originally thought.
With new benchmarks in place, it will be interesting to see what the latest government numbers look like when released tomorrow. The best guess right now is that the September payroll increase will look a lot like the ADP number.
If that is correct, I am sure there will be claims of political bias. I have addressed this before, but let me say this now, before any number comes out: The BLS data are done in a totally non-political manner by professionals who are much more worried about getting it right than helping any political party.
Those of us who have used the data for decades, no matter what our political leanings are, defend the data. We know they have problems and will be revised, but the data are what the data are and we live with them. So if the numbers are strong or weak, so be it.
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