ADP Employment Report: More Fake News

Put it on CNN and it’s “true.” Americans will turn on their tv’s and open their newspapers tomorrow (the small percentage that still read newspapers) to hear and read that the U.S. economy “created” nearly 300,000 jobs in February – at least according to ADP. . The easiest way to hold ADP accountable and eviscerate the credibility of their report is to examine their “methodology.” Of course, this requires searching the ADP website to find the area way at the bottom where it describes its “methodology,” something no fake news reporter or analyst has to time with which to bother.

As ADP describes in its “methodology” section, it seeks to “closely align” the final output of its calculations with that of the “final print of the U.S. Bureau of Labor Statistics (BLS) numbers.” Thus, ADP’s “job creation” report is really nothing more than a regurgitation of the fraudulent employment report issued by the U.S. Government. Here’s the other variables of input that the new ADP methodology now incorporates into its methodology used in ADP’s “enhanced ADP National Employment Report”

• ADP matched-pair growth rates by industry
• Lagged values of BLS estimates of growth of employment by industry with industry specific restrictions
• Unemployment Insurance Claims (UNI_US)
• Oil Prices
• The Michigan Consumer Sentiment Index (CSENT_US)
• The Composite Index of Leading Indicators (LEAD_US)

The “soft” data reports above have nothing do with job creation. Unemployment claims are historically low because the labor force participation rate is historically low, which means that the number of people who are terminated and can file for nemployment benefits is historically low. How is this variable an input on job creation?

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