(By Karl Denninger) Just when I thought the silly couldn't get any more so
I get a report like this.Employment in the U.S. nonfarm private business sector increased by 201,000 from July to August, on a seasonally adjusted basis. The estimated gain from June to July was revised up from the initial estimate of 163,000 to 173,000.
Did you catch it?
The first is a statement of change.
The second is an admission that the statement is not factual; it is an estimate.
I've always known that ADP estimates employment changes because they do not handle all of the payrolls -- they extrapolate to the entire economy from their customer data, which they actually have. So their data is a count, but the extrapolation makes a number of assumptions, one of the most-important being that the ratio of firms using them to not is something they can adequately measure.
This is one of the many reasons their data is often wildly at odds with the NFP that comes out two days (or one, in the case of a holiday as was the case this month) later.
But -- did you know this? If you didn't, now you do.
In any event you have to take notice of this number as it is wildly over expectations. My best guess for tomorrow has to be ratcheted up to +125k as a consequence of it and the claims number this morning -- I was at +99k (just under 100k), so this is a fairly significant revision.
At the same time I want to note that effectively the entire gain in this report (92%) was in service jobs, and while our economy is about 70% service sector, this strongly implies that what's being created are "McJobs" that pay crap and have zero or few benefits -- that is, the common worker's standard of living is continuing its inevitable decline.