The jobs number that blindsided economists last month

03.05.2017 / 13:38

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ADP payrolls data is expected to show that 175,000 jobs were added in April, but traders are skeptical after it reported a huge gain in March jobs while the government payrolls number fell below 100,000, missing forecasts by a landslide.

The ADP report is scheduled for 8:15 a.m. ET Wednesday, and the government's April jobs data is expected Friday morning.

ADP's data is treated as a kind of preview for the monthly government report, which is typically released two days later. While ADP hasn't been a perfect guide, the market does watch it as a barometer and does take it into account when anticipating the government's monthly report from the Bureau of Labor Statistics.

So when ADP reported March jobs rose a whopping 263,000, well above expectations, it encouraged some economists to up their forecasts for that month's employment report.But the BLS reported just 98,000 total March nonfarm payrolls, and 89,000 of those were private sector payrolls, stunningly below ADP and also the 185,000 consensus number that economists were forecasting. So the question is do markets trust ADP this time.

Economists expect the government to report 185,000 nonfarm payrolls Friday.

"There's one conceptual difference between BLS and ADP. With BLS, you have to have been paid during the survey week. ADP is simple. You have to be on the payroll. ... The bar for BLS is higher," explained Mark Zandi from Morgan Stanley.

"It's hard to predict that number because it's all over the place, but people are going to look at it. It was a little misleading last time. People are going to look at that number because it's an early view of what might come out Friday. It's important," he said.

Source: Bloomberg

Trader Bozhidar Arabadzhiev

Varchev Traders

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The jobs number that blindsided economists last month

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