As reported in the Wall Street Journal ‘Real Time Economics’ Blog Newsletter (whatever a blog newsletter is), ADP is predicting that when the March jobs report is released, the numbers are going to be substantially better than the consensus economic forecast. ADP and Macroeconomic Advisers, a forecasting firm, are estimating that the U.S. economy added 8,000 non-farm jobs last month. This stands in stark contrast to the 70,000 jobs lost during the month that Ray Stone of Stone & McCarthy are estimating for March in Kelly Evans’ WSJ post:
ADP Report Suggests Recession to Be Averted
The latest estimate of job growth from payroll giant ADP and forecasting firm Macroeconomic Advisers suggests employment isn’t booming, but it ain’t too shabby either.
Private nonfarm employment grew by a seasonally-adjusted 8,000 jobs in March, the report said, after declining by a revised 18,000 jobs the previous month. The report has been criticized in recent months for being overly optimistic compared to the Labor Department’s official tally of job creation.
An increase of 8,000 private-sector jobs in March, plus an estimate of 20,000 public-sector jobs that ADP doesn’t count, means employers would have added nearly 30,000 jobs in March when the Labor Department releases its estimate on Friday. That figure is way above the consensus, which expects a loss of around 45,000 jobs for the month.
“Since October 2007 there has been a dramatic divergence in these two measures of employment,” wrote Ray Stone of Stone & McCarthy Research Associates in Princeton, N.J. following the report’s release. “While we don’t want to be dismissive of the ADP story, we are inclined to favor the message told by the recent [Labor Department] data…[which] seems to fit better with our general understanding of current economic conditions.” Mr. Stone is predicting a loss of 70,000 jobs in March.
But the pessimism of recent months seems to have lifted somewhat. Yesterday, a mediocre (rather than horrendous) report of manufacturing activity and record-breaking write-downs by UBS prompted some to start asking whether we’ve reached the bottom of the credit crunch. The Dow Jones Industrial Average rose nearly 400 points on the resurgent optimism.
Joel Prakken, chairman of Macroeconomic Advisers, said the ADP figure “joins a list of growing indicators that while still weak are better than expected.” He said the “very clear” signals of huge job losses recorded in the ADP survey during the 2001 recession aren’t being repeated this time around. “The survey is now signaling soft employment and an [economic] slowdown but nothing that suggests recession,” he said.
The LinkUp report on corporate web site job listings for March will be released tomorrow. Those numbers rose substantially from February’s dismal numbers and echo to some degree the optimism in ADP’s numbers. JobDig’s record-setting sales numbers in March may also provide some indication that the jobs market is not as horrendous as some believe it to be. Based upon the LinkUp data and JobDig’s sales results in March (which arguably could be the result of us simply grabbing market share due to a superior service offering), it is my prediction that the March jobs numbers are going to surprise people. Employers, at least those across the middle of the U.S., seem to still be hiring in pretty healthy numbers.