ADP thinks the government is overstating employment numbers by nearly a million.
I don’t know enough to have an opinion about ADP’s number.
As to the government’s numbers, the big issue over the last 10 years there has been that the government’s two employment numbers – one derived from firms (the CES) and one from employees (the CPS) – had some large divergences, particularly around the middle of the last decade. The usual interpretation of this is that a lot of people were reporting themselves as employed when they only had a tenuous connection to the job market – like day traders and house flippers.
Currently the CPS numbers are pulling away from the CES numbers, which is normal in the beginning of a recovery. The light blue line above appears to be from the CES data, so the discrepancy between ADP and the CPS data would be getting even larger.
Read “Mind the Gap: Employment Figure Tell Different Stories” in the October 2-3 issue of The Wall Street Journal.
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