ADP +297,000

I’m usually pretty skeptical of the ADP employment forecast but I should note that it came in very strong today. According to ADP, employers added 297,000 jobs last month which is the largest monthly increase in 10 years.

The official employment report comes out on Friday. ADP does its own private sector forecast. Overall, ADP’s track record is pretty mixed.

Over the previous six reports, ADP’s initial figures were closest to the Labor Department’s first estimate of private payrolls in July, when it understated the gain in jobs by 29,000. The estimate was least accurate in October, when it underestimated the employment gain by 116,000.

ADP’s initial November estimate showed a 93,000 gain in private employment compared with the government’s estimate of a 50,000 increase. October payrolls rose 79,000. Projections among the 33 economists surveyed by Bloomberg for December ranged from gains of 50,000 to 150,000.

“There is certainly a strong signal in the ADP data,” Joel Prakken, chairman of Macroeconomic Advisers LLC, which produces the figures with ADP, said in a conference call with reporters. “It has accelerated in each of the last three months and the gains that we reported this morning were widespread.”

Jeff Cox at CNBC’s NetNet notes that not everyone is buying the ADP number. We’ll know more on Friday.

Posted by on January 5th, 2011 at 10:15 am


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