Comments on: ADP Goes Back to the Drawing Board

By: ADP? Really? | The Big Picture

ADP? Really? | The Big Picture — Wed, 06 May 2009 13:55:35 +0000

[...] the history of the ADP report’s failure to correlate very well with its bogey (BLS’ Non-Farm Payroll), the reaction is revealing of [...]

By: mark mchugh

mark mchugh — Sat, 10 Jan 2009 03:16:02 +0000

Just cycling back through old posts.

Barry, TPTB is conspiracy theorist for “The Powers That Be”.

By: Good News Economist

Good News Economist — Thu, 08 Jan 2009 17:49:10 +0000

Everyone seems to be ignoring the fact that for the last 6 weeks unemployment claims have been decreasing. For two weeks straight now the 4-week moving average is *negative*.

We don’t need ADP or anyone else to tell us that job losses are *slowing*.

The data is there if you choose to use:
http://mast-economy.blogspot.com/2009/01/all-eyes-on-jobs-data.html

Last week everyone ignored the fact that the claims *drop* was the largest in 16 years.
The basis is negative right now, and no matter who reports the data (ADP, BLS, DOL, etc, etc), if it is good, it will be dismissed.

GNE
http://goodnewseconomist.com

By: jasonch

jasonch — Thu, 08 Jan 2009 08:57:41 +0000

Barry,

I completely agree with your point about the ADP data being pure, and grounded in some objective reality, based on all the transaction volumes that they process.

The question it raises, however, is one of BLS methodology. Wasn’t the BLS methodology created way back when, before there were computers involved in payroll? Perhaps it’s time that the government updated that methodology. But they shouldn’t need ADP.

The IRS receives withholding on every single paycheck transfer in the US from employer (with Tax ID numbers) to employees (with social security numbers). The data should be easily joined with employees address to make it geographically relevant, and SIC codes for the employer’s industry to identify sector breakdowns.

I just don’t see why the employment data is even a medium difficulty problem to solve.

By: MatB

MatB — Thu, 08 Jan 2009 05:33:37 +0000

I never understood why they tried to mimic BLS numbers either. ADP pays 1/6th of all non-government employees in the U.S., that seems like a good enough set of data to stand on it’s own, completely apart from the BLS numbers.

By: Concerned American

Concerned American — Wed, 07 Jan 2009 23:37:14 +0000

Leftback,

The market would go up. Less business expense equals more profit. Crazy, but that seems to be the pattern.

By: wunsacon

wunsacon — Wed, 07 Jan 2009 23:29:41 +0000

Er, I meant really just “political” reasons… I don’t see how this is better for their business (notwithstanding Bill’s reasonable attempt — because I think anyone who comes out with their own, more accurate numbers will gain more of a following).

Maybe they don’t want to rock the boat and end up in a situation where they need TARP money but can’t get it.

By: wunsacon

wunsacon — Wed, 07 Jan 2009 23:19:25 +0000

I bet ADP was asked or decided on their own not to present their own data for political and/or business reasons.

By: leftback

leftback — Wed, 07 Jan 2009 22:13:44 +0000

Wonder what would happen if BLS reported -1,000,000 on Friday?

By: Bill McDonald

Bill McDonald — Wed, 07 Jan 2009 19:23:15 +0000

Publishing ADP’s payroll information is worth millions in free advertising and name recogniton for ADP, and tracking the BLS numbers better will insure that wonderful free coverage continues.

ADP data is from a subset of US business, they tend not to cover very small companies. ADP’s market share is not uniform across all business sectors, as an example, Bank of America has a large market share for many high tech companies. So the ADP data is not a perfectly representative sample across all sizes and sectors.

While ADP data is a large enough sample of the whole to have value, the BLS numbers are still more popular, and get more converage from the financial news media.