Wednesday, June 05, 2019

Quick comparison of ADP, ISM Non-Mfg Employment Index and BLS Report for the Month of May

by Calculated Risk on 6/05/2019 02:26:00 PM

The ADP employment report was weak this month with just 27,000 jobs added. In general, the ADP report hasn't been very useful in predicting the BLS report for any one month, but this does suggest some downside risk to the May employment report to be released on Friday.

However, the ISM non-manufacturing report suggested solid employment growth in May. So I thought I'd look back at the three previous years and compare the ADP and ISM reports to the BLS report.

In May 2018, the BLS reported 223,000 jobs added (218,000 private sector jobs added).  The ADP report showed 178,000 jobs added, the ISM non-manufacturing employment index was at 54.1.

In May 2017, the BLS reported 138,000 jobs added (147,000 private sector jobs added).  The ADP report showed 253,000 jobs added, the ISM non-manufacturing employment index was at 57.8.

In May 2016, the BLS reported 38,000 jobs added (25,000 private sector jobs added).  The ADP report showed 173,000 jobs added, the ISM non-manufacturing employment index was at 49.7.

This is a very small sample, but neither the ADP or the ISM non-Mfg employment index correlates well with the BLS report, but the ISM report has probably been a little more useful.  For the previous three years, the ADP and the ISM non-Mfg employment index moved somewhat together - but this month the readings were very different.