What is ADP Employment Data?

2508 reads · Last updated: December 5, 2024

ADP employment data is an economic data indicator released by the American human resource management company Automatic Data Processing, Inc. (ADP), which is used to measure the changes in non-farm employment in the private sector in the United States. This data is usually released before the U.S. Department of Labor publishes the non-farm employment report at the beginning of each month, and is therefore considered an important indicator for predicting non-farm employment data.

Definition

ADP Employment Data is an economic indicator released by Automatic Data Processing, Inc. (ADP), a human resources management company in the United States. It measures changes in non-farm private sector employment in the U.S. This data is typically released before the U.S. Department of Labor's monthly non-farm payroll report, making it an important predictor of the official employment figures.

Origin

The ADP Employment Data was first released in 2006 to provide investors and economists with an early preview of the employment market conditions. Because it is published before the official non-farm payroll report, ADP data quickly became a focal point for market participants.

Categories and Features

ADP Employment Data is primarily divided into two categories: employment changes in small businesses and large businesses. The small business data reflects employment trends in smaller companies, while the large business data focuses on larger corporations. The advantage of ADP data lies in its timeliness and focus on the private sector, but its drawback is the potential discrepancy with official data.

Case Studies

For instance, in March 2020, ADP data showed a significant drop in U.S. private sector employment, indicating an impending economic recession. In December of the same year, ADP data again showed weak employment growth, aligning with official non-farm payroll data, helping investors adjust their expectations.

Common Issues

Investors often worry about discrepancies between ADP data and official non-farm payroll data. It is important to note that ADP data only covers the private sector and excludes government employment, which can lead to differences. Additionally, as a predictive measure, ADP data may be subject to revisions.

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