Cheat Sheet Q&A: Differences between the ADP Report & The BLS's report:
Today's entry: How can two reports be so different in the same month? After the Wednesday jobs report I was expecting a blowout number on Friday & it turned out to be pitiful instead.
Bottom Line: This isn't a new conversation but it certainty has gained extra interest in the wake of the stark contrast in job gains added in March. Let's start with the known differences between the two reports:
- ADP Report: Private Sector jobs
- BLS Report: Public & Private sector jobs
So the BLS figures include government jobs that aren't factored into the ADP Report but as it turns out that doesn't explain the difference between the 263,000 jobs the ADP Report suggested that we added and the paltry 98,000 that the BLS report suggested. Here's the quote from the BLS report: "government, showed little or no change over the month". So what gives?
The methodology of the ADP Report:
- ADP data is used by Moody's analytics to project the job changes
- The BLS Report uses employer call out research that's projected by BLS economists
So what's the difference here? ADP processes the HR and payroll data for more than 14% of Americans in the workforce. So the starting point is hard/real data. Moody's then uses the data to project the final outcome. The BLS strictly uses call out research to companies that's then used to project the result. The end result over the years has been that the ADP & BLS information often end up in almost exactly the same place but often through a series of revisions. Data is "revised" for up to three months after a initial report. Historically the initial ADP data has proven to be the most accurate which stands to reason given the the initial data is factual rather than subjective via the input received by call out. The image for this article is the historical side by side comparison overtime between the two.
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