Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Report on Business

Economy Lab

Delving into the forces that shape our living standards
Best Business Blog, EPPY awards, 2011 and 2012

Entry archive:

Economy Lab has moved

Only Globe Unlimited members will now have access to a wide range of insightful commentary
and analysis on the economy and markets previously offered on this page.


Globe Unlimited subscribers will be able to read these columns,
written by some of Canada’s most deeply respected economists,
such as Christopher Ragan, Sheryl King, Andrew Jackson, and Clement Gignac,
as part of our ROB INSIGHT section.


All of our readers will still be able to browse the Economy Lab archives and read our
broader coverage of economic data and news by accessing their 10 free articles a month.


Learn more about Globe Unlimited and how to subscribe.

Today’s ADP private payrolls report and Friday Labour Department official jobs report will be the last indicators of the U.S. jobs market before Tuesday’s presidential election. (JONATHAN ERNST/REUTERS)
Today’s ADP private payrolls report and Friday Labour Department official jobs report will be the last indicators of the U.S. jobs market before Tuesday’s presidential election. (JONATHAN ERNST/REUTERS)

U.S. private payrolls report to reflect its public relations makeover Add to ...

Automatic Data Processing Inc., the payroll crunching firm better known simply as ADP, is updating its notorious monthly hiring indicator Thursday.

After a considerable amount of bad press over big misses compared with official Bureau of Labour Statistics (BLS) data, ADP brought in Moody’s Analytics to overhaul its methodology. The ADP survey now includes 406,000 of the firm’s clients, from 344,000, and 23 million employees from 21 million previously. ADP says its sample represents 20 per cent of all U.S. private sector employees.

More Related to this Story

ADP and Moody’s say their new approach has a 96 per cent correlation with the Labor Department’s monthly surveys.

Economists say they will wait and see.

“ADP seems to be proud of its 96 per cent correlation between change in ADP new numbers and change in private payrolls by the BLS,” Matthieu Arseneau, an economist at National Bank Financial in Montreal, said Wednesday. “They forgot to mention that with its old methodology the correlation was not less than 95 per cent and discrepancies were sometimes significant.”

Mr. Arseneau said the average miss of the old methodology was 61,000 and the new methodology would have produced an average miss of 54,000.

That’s something, but probably not enough to convince investors to get ahead of the official data, which will be released Friday.

But while the number may not move markets, it will certainly induce plenty of anticipation. The Friday jobs report is the last before a presidential election on Nov. 6 that revolves almost entirely around the strength of the economy.

In September, the unemployment rate fell below 8 per cent for the first time since the first month of Barack Obama’s presidency. Many on Wall Street called that a fluke.

We’ll find out for sure on Friday with the October numbers. Until then, for better or worse, we’ll have ADP to talk about.

Follow on Twitter: @CarmichaelKevin

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories