Pro Perspectives 9/1/21

September 1, 2021

It's jobs week.  The ADP jobs report today showed a big miss for a second consecutive month.

What does this mean for the big jobs report due on Friday?  

Keep in mind, this ADP report (which is aggregated from actual payroll data from U.S. ADP payroll clients) tends to be better at predicing the final revision of the big government published jobs report (the BLS's nonfarm payrolls), rather than the first print.

On that note, in the July report, the ADP reported a big negative surprise.  A couple days later, the BLS reported a big positive surprise.

With that, should we expect the BLS to report a negative revision to their July number on Friday?  And if that's the case, reflecting a employment picture less optimistic than we thought from this prior report, will we get a negative surprise on Friday?  Maybe.  

There was indeed uncertainty surrounding the virus throughout the month of August.  And that may have weighed on new hiring.  And we know, from private jobs listings, there remains around 1.4 million unfilled jobs.

So the number may very well come in softer on Friday. 


But the jobs report, at this state, isn't a view on economic health.  It's a view on policy, and getting people back to work.  And with that, over the course of July and August half of the states have now withdrawn from the federal unemployment subsidy.  This means that September jobs data should start reflecting policy that is incentivizing people to get back to work (at least in half of the country).