Friday, September 2, 2011

No Jobs Created in August According to Government Stats (But the True Picture May Not Be As Bad)

According to government statistics, private sector jobs grew by only 17,000 the past month (which is very anemic), and creating a net zero number since there was that same number of reduction of the growth of government jobs. As of right now at least, the market seems to be reacting negatively. (The Dow is down by about 2% last time I checked.)

Each month I am amazed by the obsessive focus on government statistics since the payroll company, ADP, produces numbers of its own which always has intuitively struck me as far more reliable. Why? Because ADP processes payroll for something like 20% of the entire U.S. private sector. When new employees are brought on board a company, they are of course immediately added to payroll and that is reported to ADP. So undoubtedly ADP has excellent data, I would suspect the best data, by far, that is out there. What do their numbers show? Close to 100,000 private sector new jobs for the past month. Still not great but a heck of a lot better than the 17,000 number reported by the government.


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