ADP Shocker Estimate: Economy to Add Only 27,000 Jobs in May

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ADP estimates the economy added only 27,000 jobs in May. The consensus estimate by the BLS, for Friday, is 180,000.

The ADP National Employment Report for May is worth a look, because the numbers are a bit shocking, at least compared to consensus estimates.

Compared to BLS, sometimes ADP is much higher and sometimes much lower. Misses, assuming the BLS is accurate (not necessarily a good assumption), appear to be random.

ADP vs BLS

ADP and the BLS both heavily revise numbers over time, so the numbers eventually converge.

Trend Change or Outlier?

Averages

  • The average for the year is 188.
  • The 3-month average is 152.
  • The 2-month average is 149.

If this is an outlier, then any of the averages are a better indicator than judging from the one-month total.

Consensus Estimates

  • The Econoday consensus estimate for ADP was 175,000 jobs.
  • The Econoday consensus estimate for the BLS is 180,000 jobs.

Jobs vs Employment

Last month, the BLS said Jobs Rose by +263,000 but Employment Declined by 103,000.

In the past year, the difference between jobs and employment is a whopping 1,191,000. That's a discrepancy of 99,250 every month, in favor of jobs.

In that regard, 27,000 no longer seems shocking.

I suspect the BLS and ADP are double-counting part-time jobs. Neither weeds out duplicate social security numbers.

We hear from the BLS on Friday.

Mike "Mish" Shedlock

Comments (12)
No. 1-5
Menaquinone
Menaquinone

Let me splain it in words of one syllable. Make it here or Trump will crush your biz. Heads up Mary Barra and Tim Cook.

Tengen
Tengen

Not sure about overall ADP accuracy but the BLS may be the biggest joke in the history of government statistics. Well, they may be on par with the old Soviet Central Statistical Directorate around the Brezhnev era.

The BLS certainly took a page from the Soviet (Stalin) book with their "no person, no problem" motto. Our economy could pancake and we'd still have 2-3% unemployment and the BLS would assure us that 300M Americans are outside the labor force and therefore uncounted, presumably to take up lives of leisure.

Bam_Man
Bam_Man

The ADP report is notoriously unreliable and often bears no resemblance whatsoever to the BLS numbers.

Sechel
Sechel

tariffs? maybe this is what has powell so worried

Casual_Observer
Casual_Observer

Mark Zandi said business capex spending is dead in the water. The recession may be on us faster than anyone thinks.