Wealth Consulting Group CEO Jimmy Lee on market outlook, recession risk in the U.S. and the expected jobs report.
It’s a big week for jobs data, but investors will be missing one key influential report; the ADP data, a widely viewed pre-cursor to the government’s monthly data.
The human resources management software and services provider will pause the July 7 and August 3 releases of its monthly national employment report as the company retools its methodology.
The revamped report will provide a “more robust, high-frequency view of the labor market and trajectory of economic growth” the company specified.
ADP is aiming to unveil the new report on August 31.
Ticker Security Last Change Change % ADP AUTOMATIC DATA PROCESSING INC. 213.23 +3.19 +1.52%
“ADP’s extensive dataset of over 26 million U.S. employees offers a tremendous ability to deliver a strong read of the labor market and pulse of U.S. employment,” ADP chief economist Nela Richardson said in a statement. “As the leader in providing deep data on the world of work, our goal is to issue indicators that inform business leaders, members of academia, economists and policymakers with a reliable read of the workforce.”
In April, ADP announced it would collaborate on the new report with the Stanford Digital Economy Lab, which focuses on how technologies such as artificial intelligence are affecting the workforce, business and society.
At the time, the firms said that the report’s expanded research would include an “extensive microdata analysis to understand career paths for lower-wage workers” and create new academic research on topics related to economic growth and the future of work.
ADP’s move comes as its national employment report has previously received criticism for having a poor track record of predicting the private payrolls count in the Bureau of Labor Statistics’ employment situation report due to methodology differences.
ADP reported that companies added just 128,000 private non-farm jobs in May, sharply missing the 300,000 gain that economists surveyed by Refinitiv had predicted. The report marked the worst month for job creation since April 2020.
The hiring deceleration largely stemmed from small businesses, as companies with fewer than 50 workers actually saw payrolls plunge by 91,000 last month. The decline was even more pronounced in businesses with fewer than 19 workers, with those employers accounting for the bulk of the losses last month, shedding 78,000 jobs.
Meanwhile, BLS’ more comprehensive report revealed that employers added 390,000 non-farm jobs in May, beating the 328,000 jobs forecast by Refinitiv economists. The Labor Department noted that gains were broad-based, with the biggest increases in the pandemic-battered leisure and hospitality industry (84,000), professional and business services (75,000) and transportation and warehousing (47,000). Nearly every industry gained positions last month. Retail was the exception, shedding nearly 61,000 jobs.
The Labor Department’s jobs report for June will release as planned on July 8. Economists surveyed by Refinitiv are expecting the Labor Department to say that the U.S. economy added 270,000 new nonfarm jobs in June.