Mecklai Graph: ADP Vs Gov non farm employment change

Mecklai graph of the day: ADP v/s Gov. non farm employment change

The Automatic Data Processing Inc. (ADP) released its employment change data for the month of November which excludes farming industry and government. It acts as a leading pointer and precedes the government data by 2 days giving the markets an insight into what to expect from the government figures.

The data for the current month came in at 118K as against an expectation of 129K and there was large consensus that there was a negative outlook based on Hurricane Sandy. There is also expectation that the same would be reflected in the Government’s non farm employment change. The Fed’s October industrial production report noted that the hurricane cut output by 1.0%. However, the reduction in output of utilities, chemicals, food, and transportation equipment does not necessarily translate into lost jobs.

Tomorrow’s data point will be closely tracked with an expectation of 90K as against a figure of 171K for October. The November pace of growth in the labor force and employment is expected to come in below the October gains with the mix leading the unemployment rate to edge up to 8.0%.

The below graph plots the data for the change in non farm employment in the U.S from ADP and government sources.

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