The ADP jobs report is a privately run survey similar to the Bureau of Labor Statistics’ jobs report that usually comes out on the first Friday of the month.
This month, the ADP report takes on a critical role because of the likelihood that Bureau of Labor Statistics' jobs report will not be published due to the ongoing government shutdown. The BLS' website says that the bureau will not issue reports during the shutdown.
The employment summary is not the only government-issued report that will be missed. Tuesday’s report on construction spending from the Census Bureau was delayed. If Congress doesn’t approve government funding, Thursday’s release on factory orders from the Census also will be missed.
That means that policymakers and investors who normally rely on a steady flow of economic data are in effect flying blind, and are left to rely on numbers provided by private companies and the Federal Reserve, which funds itself.
Usually the jobs report is given the greatest weight among the indicators, and September is the only month of jobs data the Federal Reserve will have to look at when it meets at the end of October and decides whether to continue its bond-buying program at the current rate.
The headline ADP number indicates no major changes in the health of the labor market. The 166,000 new jobs were a slight improvement over August’s revised 159,000 mark, although that number was lowered from an initial estimate of 176,000. ADP’s revised August number tracked the BLS’s estimate fairly closely. The Bureau of Labor Statistics jobs report showed 152,000 new private-sector jobs in August. For the past three months, the U.S. economy has averaged just short of a 150,000 gain in seasonally adjusted non-farm payrolls.
While the ADP jobs report can give a big-picture indication of the state of the economy and capture any huge movement in jobs data, it does not always closely track the BLS numbers, isn’t as accurate, and can’t be regarded as a substitute. Also, it doesn’t cover government jobs, which are of particular interest because the effects of the sequestration spending cuts are not yet clearly understood.
Nevertheless, it’s likely that the ADP numbers are the only ones that the Fed and others who closely watch the data will have access to in the weeks ahead.