ADP Report Shows 2010 High for Jobs Lost in September

This Friday, the government releases its official unemployment data for September, but ADP provides a sneak peak on what to expect today. It isn't good news. The company that specializes in payroll services says (.pdf) that 39,000 private sector jobs were lost last month. That's the most it has reported lost in its initial estimate since December 2009. This likely foreshadows a grim report later this week from the Bureau of Labor Statistics.

First, this report came in way below expectations. Economists predicted around 20,000 jobs would be added. Instead, 39,000 were lost. They weren't even close.

But how might the ADP report relate to what we learn on Friday from BLS? There tends to be some correlation. Although the numbers vary rather widely, big moves tend to occur in similar directions. Here's a chart that shows this with two separate axes, the left vertical axis for BLS and the right for ADP:

adp v bls 2010-09.png

It's pretty easy to see the correlation here. While not perfect, it certainly appears to imply that BLS will also report fewer private sector jobs added in September than in August. This is ADP's worst first estimate of the year, so it's certainly plausible that BLS could provide the weakest private sector hiring number of 2010 as well. If it does, then it could also be the first report of private sector jobs lost this year.

A very bad BLS report on Friday has a few political implications. First, it will be the last unemployment reading before midterm elections. If it's also the worst of the year, then that will likely further damage Democrats chances. Second, it will also be the final jobless number before the Federal Reserve's next meeting in November. So it provides even more certainty to the view that the Fed will take more aggressive action to loosen monetary policy in its November meeting.

Presented by

Daniel Indiviglio was an associate editor at The Atlantic from 2009 through 2011. He is now the Washington, D.C.-based columnist for Reuters Breakingviews. He is also a 2011 Robert Novak Journalism Fellow through the Phillips Foundation. More

Indiviglio has also written for Forbes. Prior to becoming a journalist, he spent several years working as an investment banker and a consultant.

The Blacksmith: A Short Film About Art Forged From Metal

"I'm exploiting the maximum of what you can ask a piece of metal to do."

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register.

blog comments powered by Disqus

Video

Riding Unicycles in a Cave

"If you fall down and break your leg, there's no way out."

Video

Carrot: A Pitch-Perfect Satire of Tech

"It's not just a vegetable. It's what a vegetable should be."

Video

An Ingenious 360-Degree Time-Lapse

Watch the world become a cartoonishly small playground

Video

The Benefits of Living Alone on a Mountain

"You really have to love solitary time by yourself."

Video

The Rise of the Cat Tattoo

How a Brooklyn tattoo artist popularized the "cattoo"

More in Business

Just In