ADP reports great Aug # but…

ADP said 201k private sector jobs were created in August, well above estimates of 140k and the most since March. Of the gain, 185k came from the service sector, most of which came from small and medium sized businesses. The Goods Producing area added 16k, 3k from manufacturing and 13k from construction. Bottom line, I’d love to cheer this report but ADP has been so inconsistent relative to the monthly payroll numbers that I don’t know what to make of it. Over time the two figures should converge but certainly not month to month. In Aug, ADP nailed it by almost matching the private sector job adds from the Gov’t but in June they bombed saying 172k job gains were seen vs 73k by the Gov’t. Friday’s Payroll estimate is 138k for the private sector, 127k overall.

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