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Friday, May 5, 2017

The Latest Employment Report

It's getting ridiculous.  Right after the end of each month, ADP issues its employment report based upon millions of actual payrolls.  A day or two later, the government issues its employment report based upon a survey taken during the second week of the month.  Lately, these two have not agreed.  For March, ADP showed enormous growth in employment, while the feds showed surprisingly slow growth.  For April, ADP showed much slower growth in jobs, but the feds showed surprisingly high levels of growth.  It's not that the two reports differ that matters; one would not expect that the two would be exactly the same.  No, the problem is that there are major differences between the two and these difference persist.

On top of these reports of questionable accuracy, we then get GDP numbers that don't seem to make sense in view of the employment results.  According to the feds, there was reasonably strong job growth during the first quarter of the year.  That job growth should indicate an economy growing reasonably well, but not on fire.  In other words, we should have seen GDP growth of 2.5% or so.  Instead, the feds reports growth of 0.7% for the quarter a few weeks ago.  That figure will be adjusted as more data comes in, but if it stays the same, it indicates a problem with either the GDP figure or the jobs data (or both).

This needs to be fixed.

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