How can there be so much discrepancy between ADP and DOL for so long? More over, how can the market be so naive to accept what ADP gives at face value and react so favorably? I can see the importance of having an independent research outfit outside of government, but Uncle Sam should really shut these fraudsters down.
I say the same thing, why is there even a monthly announcement of the ADP report before the monthly jobs report. Yesterdays rally was based off nothing but a false jobs report, it was nothing but fluff and the market rallied on it.
I don't understand... I thought one of the issues with government statistics is that they're untrustworthy? Now you have a private sector source of employment data and you want Uncle Sam to shut it down? Don't you think it's a good thing to have access to both and to be able to have a choice?
Here's a simple analogy. Suppose you went to two doctors following a discovery of a tumor. One doctor tells you the tumor is benign and there's nothing to worry about. The other doctor tells you that it's malignant and you should be operated on as soon as possible. Which doctor are you to believe? There can be a degree of difference in the treatment should the two doctors reach the same conclusion, namely the tumor is cancerous, but when these two doctors contradict one another, then you have a real problem (especially if these two idiots are the only doctors in town). ADP, which is wildly bullish, has consistently been at odds with the DOL reports. If it were just once or twice, you would rule it out as an anomaly. But such an anomaly is getting rather long and tiresome.
Sure, I understand your frustration, but surely shutting one of these sources of data isn't the optimal solution (unless, of course, there's evidence that there's deliberate misrepresentation)? Shouldn't we try to understand as much as we can about why they're so wildly different? Or maybe find a third doctor so that you can get another opinion?
Sort of like the University of Michigan consumer confidence report which is always at complete odds with the Gallop poll. I'll put on the "tinfoil hat" as most of our resident groupthink experts will call it..but honestly it's not exactly a major revelation that there is alot of implied "pressure" to release favorable numbers. I view it as akin to the ratings agencies basically rubber stamping favorable ratings for whatever floats thru the system. A truly independent source of data is worth paying attention to. Once a "ratings agency" makes it's way onto the data release docket, it's more than likely already 'captured".
Or - and here's a crazy thought - maybe ADP is the correct one. Maybe one leads the other. Maybe they are both completely wrong. Who the hell knows. I'm curious why there is the knee-jerk assumption that the worse number is the correct one. We should judge the economy by the data, not the other way around.
So many factors go into determining the net employment growth of a 300 million person country that I'm surprised it's given so much credence. And the government can't do anything to meaningfully improve employment numbers, anyway. QE2 was just a gift to the financial industry. NFP has been reduced to a number whose chief purpose is for railbirds to have something to bet on every month.