Important: "[payroll processing firm] ADP's report has a spotty track record on predicting the subsequent government jobs report"
As a rough heuristic, ADP overfits to private sector jobs and BLS overfits to government jobs. There is a popular derivative heuristic that the economy is "good" when ADP > BLS.
Surely that doesn't apply when both metrics are bad? I don't know. I'm not familiar with job reporting statistics. So info / perspective would be appreciated.
Also, when you say "over fits" I'm used to that in a machine learning context where it means data outside the fit is worse. Did you mean that ADP is more accurate with private sector and BLS is more accurate with public sector. Or is it more a matter of ADP comes in higher with private sector and BLS comes in higher with public sector. Usually, "overfit" is a bad thing in a machine learning context, but I wouldn't expect ADP to do worse in private and BLS to do worse in public. But the opposite. I would appreciate it if you could clarify the terminology from your perspective.
People that know account for these biases. This is why the ADP > BLS heuristic exists. If private sector jobs growth is less than government job growth, reflecting the biases in their respective models, that is interpreted as either the government sandbagging the numbers with make-work jobs or private sector employment being so poor that the monotonic government employment eclipses private sector job growth. Either way, it is a bad sign.
> The change in total nonfarm payroll employment for March was revised down by 65,000, from +185,000 to +120,000, and the change for April was revised down by 30,000, from +177,000 to +147,000. With these revisions, employment in March and April combined is 95,000 lower than previously reported. (Monthly revisions result from additional reports received from businesses and government agencies since the last published estimates and from the recalculation of seasonal factors.)
> Among the major worker groups, the unemployment rates for adult men (3.9 percent), adult women (3.9 percent), teenagers (13.4 percent), Whites (3.8 percent), Blacks (6.0 percent), Asians (3.6 percent), and Hispanics (5.1 percent) showed little or no change over the month.
No, this is not the reason. The numbers that get fanfare are the preliminary BLS numbers. BLS collects data through surveys. Preliminary data are published with incomplete responses. As more employers respond, the numbers get updated.
Guess which employers tend to report late? Those that are doing lots of hiring and firing. So the stable numbers come in first. Then the volatile numbers later. This is well documented, happens on the way up and down, and is constantly (and wrongly) quoted as a partisan conspiracy going both ways.
Preliminary reports always underplay the direction of the change
Because the data have been going in one direction recently. When the job market booms, the revisions are upwards. Then everyone gets to wax lyrical about how BLS is socking the President.
summary of mean revision for seasonally adjusted numbers, since 2003 are
2nd-1st: 8
3rd-2nd: 2
1st-3rd: 10
but 2025 has been consistently, so far, be negative revisions. Dec 2024 has some positive revisions but 2023-2024 on the whole was negative while 2017-2022 were on the whole positive revision. so I dont think that there is data to support consistently wrong in one direction.
Anyone want to take bets on how the revisions will go on this?
Look, yet another stellar jobs report from the B of L today, completely at odds with the actual metrics of the ADP report. CNN reports it as "The US economy added a stronger-than-expected 147,000 jobs in June and the unemployment rate fell to 4.1%"
ROFL. Good god.
The US has never had so incompetent, criminal and malicious of a government. Ever. It is full-bore idiocracy now, with absolutely in the open criminality. It isn't a "conspiracy", we know with utter fact that this cabal of Fox News halfwits and self-dealing creeps are liars. The orange felon rapist charity-thief quite explicitly thought the solution to COVID was simply to stop testing for it. US climate measurements have been annihilated because global warming doesn't exist if you don't test for it.
This is not normal. If you need to comfort yourself by pretending it is, that's just spectacularly sad.