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Wednesday, March 31, 2010

Deutsche Bank's take on the employment numbers

The ADP National Employment report measures private sector employment across a wide swath of industries and in the process attempts to proxy the non farm payroll numbers, which are typically released the first Friday of every month. Even though the stock market is closed this Friday inobservance of Good Friday, and the fixed income markets are open only half day, the March employment report will still be released. Over the last three months, ADP has been a phenomenal predictor of non farm payrolls. In December 2009, ADP came out at -84k and non farm payrolls came out at -85k. In January 2010, ADP was reported at -22k and non farm payrolls were reported at -20k. Then in February ADP printed -20k and non farm payrolls printed -36k. Over these months, the average absolute forecast error between the initial ADP figure and the initial non farm payroll reading has been only 6k. This is incredible considering the monthly standard deviation on non farm payrolls since July 2006—this is when ADP was unveiled—has been 244k.



Of course, the Govvie census workers aren't counted with today's ADP report.

1 comment :

Anonymous said...

any thoughts with earnings on APWR?