Earlier today the Automatic Data Processing (ADP) monthly payroll employment report was announced at 8:15 a.m. ET. While the majority of Wall Street and anyone who invests in a serious manner dismisses their reports as utter fluffernuttery, there is some things people should analyze before dismissing their data out of hand.
Chief Economist Nela Richardson, of whom I’ve had disagreements with her assessments in the past, summed it up best in today’s ADP press release:
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” said Dr. Nela Richardson, chief economist, ADP. “Still, the slowdown in hiring has yet to disrupt pay growth.”
So what happened? This chart below for the current era from Investing.com sums up the problem heading into payroll Thursday.
Since the peak of inflation in 2023, there appears to be a non-stop contraction in private payrolls per ADP. Keep in mind they only measure reported private payrolls which are processed where reporting is visible to their data centers, a substantial data size when taken into account.
The accuracy of their reports has long been taken as a “joke” by the media and economic elites, yours truly included, but when a pattern or trend becomes established by any data source it is hard to dismiss out of hand.
Especially when the “official” government data has become so politicized and polluted it’s hard to discern if the data is or is not out for election purposes.
With that rant and commentary in mind, I decided to be cheap, lazy, and quick with my chart of the night. By overlaying the same data series with all revisions currently over the 2004 through winter of 2008 time period, there is some trend analysis that may or may not be worthy of paying attention to.
Granted, it’s not a one for one time period, it’s not identical per capita or population related data, but a trend pattern does appear.
As the economy began to deteriorate in late 2007 through early 2008(darker blue) the declines became repeated and more noticeable; all the while as the NBER and financial media refused to recognize the real recession began in December of 2007.
Are we repeating this pattern?
It’s way too early to tell.
But if I was a serious investor with some skin in the game, I might want to start listening to what those stupid little canaries are singing because it might be a sign of major economic issues on the horizon.
