The ADP Report Has Become A More Reliable Predictor Of The Official Jobs Report
Economists estimate U.S. companies added 180,000 payrolls in July, down from 188,000 in June.
"The ADP report, which has become more reliable recently, could influence expectations for Friday, although its misses can still be sizable," said High Frequency Economics' Jim O'Sullivan who's looking for 190,000.
But that doesn't mean you should put all of your money on it.
"The ADP payroll prediction series is now calculated by Moody’s Analytics, based on data supplied by ADP, the payrolls services company," expanded UBS's Kevin Cummins. "The report started using a new methodology in October, although its track record is still largely unproven, although the miss in June was quite small (-14k). The absolute value of the miss between the ADP and BLS data has averaged 39,000 since the change in methodology in October. For comparison, from January 2008 through September 2012 the average absolute miss was 81,000."
But...
"On a month-to-month basis, the ADP data still appear to lack reliability as a predictor when the errors change direction," added Cummins.
The report will get released at 8:15 a.m. ET.