How to interpret the Chart?

The key forecast of total nonfarm private employment is represented as both a monthly employment level and a monthly change in employment. The employment level represents the total number of nonfarm private jobs in the U.S. economy at a common point in time each month. The change in monthly employment represents the increase or decrease in employment between these common points in time in two consecutive months. You can observe trends in employment by simply comparing each month's employment level change.

Stock Market Impact

The ADP National Employment Report is a credible monthly resource derived from actual payroll data, and provides insight into short-term movements in employment across various company sizes.

Category: Employment

The ADP National Employment Report provides a unique perspective on total nonfarm private employment, select private industry sector employment, and private nonfarm employment by company size that is not available from any other source. Economic practitioners and financial market professionals recognize the value of this unique perspective and use the ADP National Employment Report in combination with other publicly available estimates of employment or their own proprietary models of employment.

Market Importance

The ADP report is often seen as a precursor and an indicator of the more important jobs report to be released on Friday by the Labor Department. The ADP numbers are seen to be less accurate than the Labour Department's results. In January's numbers the ADP showed gains of 170,000, while the consensus was a rise in 172,000. The numbers may not be the most reliable indicator of actual jobs growth but they can be used as an early indicator. The ADP report provides a framework to help forecast the results that will appear on Friday. At this stage unemployment is set to stick at 8.3%. Unemployment is one of the key indicators in an economy recovering from recession. This report will be cited many times as evidence of more specific predictions in Friday's report.

The ADP employment report is compiled from it own records on payroll data. The analysis and reporting is mostly done by Macroeconomic Advisers. The set is a sample size of around four hundred thousand businesses and 24 million employees. The data is analyzed in a way similar to the US Bureau of Labour Statistics treatment of their own data and is used to compute monthly employment. The ADP report only includes private sector industries, displaying no information for government workers in its current form. The next release of an ADP Employment Report will take place on the fourth of April and will cover the month of March.

ADP vs Employment Situation

The reports from Challenger and ADP come ahead of the government's highly anticipated monthly jobs report, due Friday, though their figures aren't always reliable predictors of the government's numbers.

Many people overlook the ADP report because they rely upon the Governments Employment Situation report to give the lay of the land. However, historically we have found the ADP to be the more accurate one in terms of the trend.

The ADP survey only covers hiring in the private sector and excludes government job growth. The Labor Department's report on Friday will offer a more complete picture. The two surveys reported roughly the same private-sector job creation in July. But they have diverged sharply in previous months.

Although the ADP survey is rarely a perfect predictor of nonfarm payrolls which follow, today’s strong number may raise expectations for tomorrow’s figure
The two surveys reported roughly the same private-sector job creation in July. But the two surveys have diverged sharply in previous months.