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ADP and TrimTabs See Different Direction on Payroll Growth in July

With all eyes looking out for this Friday’s employment situation report from the U.S. Department Labor, economists and investors alike are searching for any hints they can find regarding how the report will turn out. The two preview numbers often used are from ADP and TrimTabs, but ADP is given far more clout than TrimTabs. Even so, these reports are looking quite different.

ADP reported that private sector employment increased by some 185,000 jobs from June to July in its June ADP National Employment Report. The report is derived from ADP’s actual payroll data and it measures the seasonally adjusted change in total nonfarm private employment each month.

ADP said that 59,000 of these were from small businesses, another 62,000 from medium-sized businesses and 64,000 from large businesses.

TrimTabs projected that the economy added some 268,000 jobs in July. This is much higher than the estimates for June of 190,000. TrimTabs bases its new jobs estimates on actual daily withholding tax flows into the U.S. Treasury from the 143 million U.S. workers subject to withholding.

Still, TrimTabs made a key warning here: The initial jobs numbers (due out for July on Friday) are the result of small samplings and often inaccurate because they are subject to heavy revision in subsequent months as the Bureau of Labor Statistics receives further data.

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As far as what to expect from the Labor Department on Friday, these are the Bloomberg consensus estimates for July:

  • Unemployment at 5.3% (5.3% in June)
  • Nonfarm payrolls of 212,000 (223,000 in June)
  • Private sector payrolls of 210,000 (223,000 in June)

By Jon C. Ogg