The Bureau of Labor Statistics will release its unemployment data for February on Friday, but one early — if not totally reliable — indicator comes from ADP, the payroll-management firm. Each month, they release their analysis of private-sector job growth a day or two ahead of the BLS, giving a sneak peek at government figures and an opportunity for analysts and investors to hone their predictions. This month, the news looks good:
Private-sector employment increased by 217,000 from January to February on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from December 2010 to January 2011 was revised up to 189,000 from the previously reported increase of 187,000.
This month’s ADP National Employment Report suggests continued solid growth of nonfarm private employment early in 2011. The recent pattern of rising employment gains since the middle of last year was reinforced by today’s report, as the average gain from December through February (217,000) is well above the average gain over the prior six months (63,000).
Unfortunately, the ADP report often shoots far higher than actual outcomes. In part, this is because ADP does not measure government employment, so job losses in the public sector don’t get factored into their results. However, that doesn’t explain all of the disconnect between ADP’s recent analyses and the overall BLS figures. For instance, ADP predicted a gain of 297,000 private-sector jobs in December that ended up being a weak 103K. Their January estimate of 189,000 added private-sector jobs ended up overshooting the eventual BLS result of 36,000 added jobs overall.
If this is close to reality, though, it will be good news indeed. But what do other early predictors say? Gallup, for instance, is much more pessimistic. Their survey has shown a flat line on job growth, and now puts unemployment at 10.3%. The survey also has combined unemployment and underemployment at 19.9%, both of which are largely unchanged over the last 13 months.
I’d expect the economy to have added a keep-pace number of jobs overall in Friday’s numbers, perhaps 110,000, but that the BLS jobless rate will go up slightly to 9.2%. We seem to be stagnating at the same level as 2010 for the most part.