Thursday, 2 October 2008

The ADP employment report for September was released yesterday showing a drop in non-farm private employment of -8,000 following a revised drop of -37,000 in August. However as noted previously, the ADp report has tended to understimate the extent of job losses when compared to the BLS non-farm payroll report.

Also it should be noted the ADP make a couple of qualifications to this months number:

the ADP Report does not reflect two special factors that might have further depressed employment in September. These are the strike of some 27,000 machinists against Boeing, and job losses related to hurricanes that struck the Gulf Coast.

Whilst most people may think the US is driven by huge corporations, the fact is that most people are employed in small companies. Payrolls of small businesses have continued to grow admidst the current economic malaise, however if stresses in credit markets are not alleviated it may crimo small business job growth going forward.

So once again the NFP on Friday is a bit of a lottery. Consensus seems to be looking for a fall of around -90k but don't be surprised if it is up to 100k in either direction of that number and as usual pay attention to the revisions. Also this month the BLS gives its preliminary estimate of it's annual revision that gets released in February. That give an idea of the extent that job losses have been under reported this year.