ADP says private NFP increased 189,000.
Sayeth ADP:
"Even in manufacturing, construction, and financial services, sectors
where employment has been under downward pressure, there are signs of
accelerating employment."
These number include a "baffling improvement in industries tied to housing and mortgage lending" (WSJ)
I’ll spend more time on this later, as I am now off to BloombergTV . . .
UPDATE: December 5, 2007 2:30pm
Outlier, anyone?
Peter Boockvar points out that:
"The Nov ADP private sector job gain of 189k was the strongest reading of the
year and 46k more than the 2nd best reading.In Nov ’06 it rose 258k, also the
strongest # of 2006, by 63k and in Nov ’05 it rose 301k, the highest in the
history of this data, 60k above the 2nd highest reading in 2005.Only in
retrospect will we know if ADP had difficulty in their seasonal adjustments for
November for the past 3 years ahead of the holiday season so it does make the
Govt Payroll data on Friday still always difficult to predict.
In other words, don’t bet the farm on this data point . . . >
>
Source:
Analysis of November’s Report
Wednesday, December 5, 2007, 8:15 am EST
http://www.adpreport.com/report_analysis.aspx
Those job figures cannot be correct.
I had read somewhere (net blogs, of course) that the percentage contribution of births/deaths has increased incredibly in the last few years. I’ll have to hunt that down…
Have fun on Bloomberg, tell Michael I said, “Hello” =P
There was a hilarious line in the Reuters story I saw where someone said, “Yeah, usually the Street discounts the ADP numbers, but these were really good so we like them.” Not an exact quote, mind you, but you get the gist.
I think it’s a seasonal adjustment aberration. Remember that huge rebound in housing we had about the same time last year? Maybe we have to start taking “global warming” in account for these seasonal adjustments.
Xmas hires?? Pretty easily explained one would think however I gather that Florida is closer to what is really happening..
“they’re good??? damn…..buy,buy,buy”
Ciao
MS
Ah, yes, the sound of another lever being pulled. The Friday number will probably come in even rosier now. Combine this with Mortgage Bankers Association says applications for home loans soared 22.5% last week, and I can smell the aroma of books being cooked in the winter air today.
I posted on this earlier, it’s an election year folks, and the administration is manufacturing roses out of you know what.
Expect to be dazzled even more for about six months, but don’t believe your lying eyes, because after the election those pink colored glasses will be in short supply. Enjoy this ride, it will be sweet but short.
Only real question is, what is the next lever to pull to make things look good, and the really tough question, which one are they gonna pull to help consumer spending (Just how do you drop oil prices to $70 a barrel for six months?).
As a boomer, I used to be young, optimistic (and poor), but now I see that I have become grey haired, cynical (and wealthy).
Lewis
I would certainly think a portion of the increase is tied to the increase in total hours that retail stores are open compared to past years given the early push on holiday sales. Open on Thanksgiving day, at 6am, ’til midnight, etc. Why pay existing workers overtime to work more hours when you can hire cheap temp workers?
Here’s the exact quote from Reuters:
“”While the market typically discounts the ADP report, a number this far out of the cloud could cause economists to revise their expectations for Friday,” said Brian Dolan, chief currency strategist, at Forex.com in Bedminster, New Jersey. “We will also now have to keep an eye on the Fed funds futures markets go see if they price in a reduced expectations of a rate cut next week,” he added.”
In construction, I’d look at the difference as “hiring US citizens” while dumping illegals from the (non-reportable) payroll.
ICE raids are effective AND put a bit of a scare into some contractors.
As to manufacturing, the USD dump of the last 90 days has to have SOME effect–relatively cheaper US-manufactured product is one.
It’s mostly noise (they have trouble with November historically) and a little bit of payback, recall Jun-Sept were ridiculously low.
For the 6 and 12 month moving average charts
http://pbp.typepad.com/economy/2007/12/adp-employment.html
“strong in construction, manufacturing AND financial services”
Yes because we all KNOW those sectors are the hotbed of hiring activity…..
the first two I could actually start to believe, however anecdotal evidence suggests to me otherwise.
Additional hiring in financial services???
that just takes the cake…
Ciao
MS
What Lewis said. The past couple months have been, and the next couple months will be, distribution and hedge adjustment time and that’s what I’m doing.
Oh, and the jobs numbers? They will be adjusted downward …but for now feel the joy (and take full advantage of it).
Off the subject, sorry.
Freezing subprime mortgages is nothing more than criminal theft. Anyone know a young bitchin smart MBA/attorney that can spend a few years at low pay? This has Supreme Court written all over it. What a way to build a resume!
The ADP employment report is out, coming in @ 189K vs expectations of 50K and last month’s upwardly revised 119K jobs. At the same time, while this is the highest reading since Nov 06, there is no denying that the trend is lower. In 2005, we averaged around 170K jobs, in 2006 it was 140K jobs, and now in 2007, prior to this #, its less than 100K jobs. While this is a very high number, its probably an outlier given the other job related data points we’ve been seeing. The big # is still friday’s payroll number which is typically 20-30K higher than the ADP reading.
I think this qualifies as the money quote from any of the noise of the ADP report
“Statistically speaking, ADP is the best single indicator of payrolls month-to-month,” said Ian Shepherdson, chief economist with High Frequency Economics. ” [B] ut it is still not very good, with a margin of error of about plus or minus 160,000.”
Gotta love that…..contradictions abound.
Ciao
MS
Why don’t we offer a $5,000 reward to anyone at ADT or Macroeconomic Advisers who provides evidence that these numbers were “adjusted” by their bosses after visits or calls from government weenies? Or anyone who can show that these numbers make any sense, especially construction, finance, and manufacturing?
I was just commenting to my SO on Sunday, while reading the WaPo, there has never been a thinner Employment section in that rag.
Maybe all of the HR people are using the internets tubes – I’ll have to check it on the Google.
When a bank hires a cleaning crew to clean up a foreclosed house, does that count as a financial sector hire?
Marcus Aurelius: This is not a time of year where professional hiring is strong. Professionals who expect a bonus paid in December know better than to switch jobs just before that, and few will want to start a hiring process just before the holidays (on both the employer/employee sides).
That of course figures in the assumption that employers prefer to hire people away from other positions, not from the “labor reserve”, but I’d say it’s a safe one to make.
“I think it’s a seasonal adjustment aberration.”
You meant the presidential election season? :-D
Funny. While everybody is speculating on Financials or Tech or Energy today, the Consumer Discretionary Spdr (XLY) is easily the worst performing Sector Spdr today. Barely green. Oops. Now it’s not.
Why bother with the ADP at all? It “predicts” the BLS jobs number. This is rather like hiring a stoner for his ability to act like a drunk.
Omigod, Dennis the Weenie is praising Hilary and her new taxes on CNBC. Sorry I did have the volume up for that one. As usual Dylan won’t let him talk as he interupts him. Dylan used to shine shoes in his last job.
Nov ’06 ADP private employment report showed a surge to 258K but the BLS employment report was only 132K.
Funny-
An Article in The Guardian (UK) today quoted a Merrill Lynch executive saying that unemployment was up- and that the Fed needed to keep cutting interst rates to stimulate the economy.
Sure hope the employment coming out Friday is much lower so that we can all be even more confused…and the service sector added another 197,000???? I guess the banks haven’t really started letting go yet.
Even more conflicting data:
“Duke/CFO Magazine Global Business Outlook Survey’s results for the third quarter showed the nation’s CFOs have turned quite sour on the economy as well as their own businesses. Quotes and statistics from the latest survey are provided below
(September 2007 Results)
Optimism about the U.S. economy plunged to a record low this quarter among chief financial officers. CFOs expect slow growth in earnings, capital spending and acquisitions and NO GROWTH IN HIRING (emphasis added). They are very concerned about weak consumer demand, rising labor costs and credit markets.”
Who ya’ gonna believe – me, or your lying eyes?
And just to add to the confusion…
“Monster, a global online careers and recruiting firm, said its Employment Index fell to 183 points in November, from 188 in October. It was 175 a year ago.
“This marks the first time since its inception (in 2004) that the Index has declined during the month of November,” said Steve Pogorzelski, a vice president at Monster Worldwide, in a statement.”
No wonder employment is a lagging indicator…no one knows what the hell is really going on…until much later.
NFP: Birth/Death Adjustments
One of the things we have harped on for quite a long time here at The Big Picture is the flawed BLS Birth Death Model (BDM). Since 2003, the B/D adjustment has been part and parcel to BLS’ Current Employment Statistics (CES) program, the official measu…