In the days ahead, an assemblage of private sector US macro releases will give traders the most comprehensive snapshot of the world’s largest economy since the funding lapse in D.C. indefinitely postponed the publication of government data.
The marquee release is ADP hiring covering October. Note that ADP’s now releasing weekly updates aimed at “provid[ing] a directional indicator of the labor market” via a four-week moving average of the latest total private employment change. ADP’s billing these tallies, which’ll come out every Tuesday, as “the most current, representative picture of the private-sector labor market.”
The first of those weekly releases showed an average increase of 14,250 jobs in the four weeks ending October 11. The decision to release the high frequency data to the public came amid reports the Fed lost access in August to figures made available to policymakers under a data sharing agreement with ADP.
In the same announcement, dated October 28, ADP said it’s stepping up efforts to “address [a] changing landscape.” “ADP’s near real-time employment data will now provide an even clearer picture of the labor market at this critical time for the economy,” Nela Richardson said, promising to deliver “an unprecedented level of weekly detail” on the current state of hiring in the US.
Suffice to say ADP’s stepping into the void and rising to the occasion. They see an opportunity in the government shutdown which, you’re reminded, only added to existing skepticism about the BLS’s jobs tally. The report was already plagued by low response rates and politicization concerns.
Consensus expects 30,000 from the monthly ADP release, due Wednesday. Recall that three of the last four ADP headlines were negative. Naively assuming no revisions, an in-line readout for October would push the three-month average into negative territory as July’s strong >100k print falls out of the lookback.
For context, the three-month average for the monthly ADP headline hasn’t been negative since August of 2020.
Traders will also be watching the Revelio Public Labor Statistics print on Thursday. Revelio tries to replicate the BLS’s monthly hiring report using individual level data from more than 100 million online professional profiles.
That series showed a 60,000 gain for September. The figure below gives you a sense of how Revelio’s tally lines up with the BLS’s count.
As you can see, there’s significant variation to put it politely. Revelio provides the same breakdown as the BLS. The numbers for September suggested hiring was concentrated in education and health services, for example.
If you’re inclined to call these alternative measures poor substitutes for the BLS data I won’t argue. Then again, no one trusts the government data either. My view is that it simply isn’t possible to accurately tally the number of jobs added or lost for a given month across a $30 trillion economy, just like it isn’t possible to determine with any degree of precision the pace of inflation for an economy that size.
But even if tallying macro aggregates is a futile exercise, somebody’s gotta do it. And at this point, the private sector has decided the government can’t be relied upon to run the numbers anymore. So, congratulations Scott Bessent: You have indeed succeeded in “privatizing” at least one area of the US economy — the business of tabulating economic data.
Also on deck this week in the US: ISM manufacturing and services (the former’s seen at 49.5, the latter at 51, give or take), Challenger job cuts for October, the preliminary read on University of Michigan sentiment for November (seen at 53) and the QRA (Bessent will almost surely avoid lifting coupon auction sizes this quarter, but bond traders are on alert for any change in the forward guidance — i.e., the “at least the next several quarters” wording that’s been in place since Yellen).
