Strategic Briefing | 10.24.12 | ADP Revises Employment Report Methodology

ADP and Moody’s Analytics Enhance ADP National Employment Report
Press release via ADP | Oct 24
ADP, a leader in human capital management services, and Moody’s Analytics, a leading independent provider of economic forecasting, today announced enhancements to the ADP National Employment Report, ADP’s widely followed gauge of U.S. nonfarm private sector employment. The newly expanded ADP National Employment Report will be issued each month by the ADP Research InstituteSM, a specialized group within ADP that provides insights around employment trends and workforce strategy. The first enhanced monthly report issued in collaboration with Moody’s Analytics will be released on November 1, and will report private payroll changes for the month of October 2012.


Dogged By Accuracy Questions, ADP Will Revamp Jobs Report
Forbes | Oct 24
Payroll giant ADP will expand and change the formulation of its monthly employment data after several months of questions about the figures’ accuracy. The report, which includes a new partnership with credit-rating provider Moody’s Analytics, will give a more detailed breakdown of the data as well as a new methodology to better align “with the final, revised U.S. Bureau of Labor Statistics (BLS) numbers.” The first new report will come next month and estimate October’s employment growth. While ADP estimates that its jobs data almost always matches the finalized government numbers—a 96% correlation since 2006, according to ADP—this year’s volatile jobs data has cast some doubts on whether ADP is a useful indicator. ADP’s report on hiring by private businesses is typically released two days before the official data. This release alone often causes a shift in the markets, and is later used to make last-minute tweaks to unemployment and job-growth estimates.
ADP overhauls U.S. private payrolls report
Reuters | Oct 24
A monthly reading of U.S. private sector employment will undergo changes to put it more in line with the more closely watched government non-farm payrolls report. Automatic Data Processing (ADP.O) said on Wednesday it had made the changes to its private job market report as part of a new partnership with Moody’s Analytics. While economists use the report to fine-tune their labor market forecasts, ADP has had a spotty track record of predicting the initial reading for non-farm payrolls. The report will include an increased number of industry categories and business sizes, ADP said. It will use a larger sample size and new methodology to further align it with the final revised readings from the Bureau of Labor Statistics.
ADP’s monthly figures are typically released a couple days ahead of the government’s report.
ADP making changes to monthly employment report, will now team on it with Moody’s Analytics
AP via Fox News | Oct 24
Automatic Data Processing Inc. is making some changes to its monthly employment report, including adding more industry categories. The company said Wednesday that the number of business sizes on the ADP National Employment Report will also be expanded. A new methodology that will better align with the final, revised U.S. Bureau of Labor Statistics numbers will be implemented as well. In addition, the sample size used to create the report is being increased. ADP said that it will no longer team with Macroeconomic Advisers LLC on the report. The companies had worked together for six years. ADP will now work on the report with Moody’s Analytics.
ADP making changes to monthly employment report, will now team on it with Moody’s Analytics
The Washington Post | Oct 24
Automatic Data Processing Inc. is making some changes to its monthly U.S. employment report, including adding more industry categories. The report will now increase to five industries from three industries. The five industries — construction, financial activities, manufacturing, professional and business services and trade, transportation and utilities — make up more than 50 percent of all U.S. private sector employment, according to ADP. The company said Wednesday that the number of business sizes on the ADP National Employment Report will also be expanded to five company-size classes from three company-size classes. A new methodology that will better align with the final, revised U.S. Bureau of Labor Statistics numbers will be implemented as well, ADP said. In addition, the sample size used to create the report is being increased.

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