ADP released a December employment estimate of 807,000, while Bloomberg’s consensus estimate was 400,000.
figure 1: From the BLS private non-agricultural employment number released in November (black), the Bloomberg November consensus as of 1/5 (blue-green), and the ADP November release (red), all data are on a logarithmic scale. Source: BLS, ADP calculated by FRED, Bloomberg and the author.
Goldman Sachs wrote in today’s report:
The ADP data this morning is consistent with the strong pace of employment growth in December, which indicates that the Omicron wave may come too late to significantly affect the employment growth of the month. Before the release of the report on Friday, we raised our December non-agricultural employment forecast by 50k to +500k (mom sa).
Interestingly, GS pointed out that employment in the hotel and leisure industries is strong, reaching +246K. This shows that omicron has received relatively little damage (especially because the BLS investigation took place earlier this month).
figure 2: The employment changes in leisure and hospitality services released by BLS in November (black) and ADP in December (red) are both 000, seasonally adjusted. Source: BLS calculated by FRED, ADP and the author.
Considering that the correlation (difference) between the two series is very low in 2021, one does not want this increase in ADP numbers too much. The regression of BLS changes to ADP changes produces an adjusted R2 of 0.8, and the standard error of the regression is 154K, so the BLS series can record negative numbers well.
