A cloudy crystal ball on the jobs outlook gets even cloudier
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Economists were surprised Friday when the government said private-sector employers added a mere 50,000 jobs in November.
On closer inspection, maybe they shouldn’t have been.
Wall Street was looking for private-sector employment to jump 160,000, based partly on an upbeat report two days earlier by payroll processor Automatic Data Processing Inc. The ADP estimate of 93,000 net new jobs helped push the Dow Jones industrial average up almost 250 points that day amid hope that the grindingly slow job market was finally improving.
The problem, however, is that the monthly ADP estimates have been widely off the mark over the last year.
In a note to clients Monday, David Rosenberg, chief economist at investment firm Gluskin Sheff, pointed out that the ADP projections and the government’s official monthly figure have been in sync only twice this year.
Most of the time, the ADP report has underestimated the number of private-sector jobs created. This time, it overstated the total.
“The best strategy heading into last Friday,” Rosenberg wrote “... was obviously to do the opposite of what the ADP data suggested -– the indicator has botched the story now in nine of the past 11 months!”
Economists and investors -- not to mention Americans who are looking for work -- are desperate for any sign that employment is picking up. This is just the latest sign of how agonizing the wait has become.
-- Walter Hamilton