Always Noisy ADP Better Than Expected, Market Confused About NEW QE

Tyler Durden's picture

The endless noise and confusion that is the ADP private jobs report (a company which incidentally just missed on its top line), and whose forecast record for NFP is simply atrocious, has posted its second beat in a row, coming at 163K, on expectations of a 120K print, and down from last month's revised 172K. And there is the problem: last month ADP said private industries added 176K jobs. The BLS' NFP print disagreed, coming in at less than half, so sadly anyone trying to gauge what happens on Friday based on today's data will be largely mistaken. But this is all we get before today's FOMC statement, so the bets have to be made, and the market has to decide: will Bernanke make it rain, or won't he, based on 3 days in which economic data has somehow managed to scrape better than expected results. In terms of what really matters: manufacturing jobs as a proxy of the US real economy, was, as usual, sad: +6,000.


ADP vs NFP and why the two simply do not correlate at the level of granularity required by HFT kneejerks:

And another way to visualize the "correlation" courtesy of John Lohman:

From the ADP report:

Employment in the U.S. nonfarm private business sector increased by 163,000 from June to July, on a seasonally adjusted basis. The estimated gain from May to June was revised down slightly, from the initial estimate of 176,000 to 172,000.


Employment in the private, service-providing sector expanded 148,000 in July after rising a revised 151,000 in June. The private, goods-producing sector added 15,000 jobs in July.


Manufacturing employment rose 6,000 this month, following a revised increase of 9,000 in June. Employment on large payrolls—those with 500 or more workers—increased 23,000 and employment on medium payrolls—those with 50 to 499 workers—rose 67,000 in July.


Employment on small payrolls—those with up to 49 workers—rose 73,000 that same period. Of the 67,000 jobs created on medium- sized payrolls, 4,000 jobs were created by the goodsproducing sector and 63,000 jobs were created by the service-providing sector.


Construction employment rose for the second consecutive month, adding 5,000 jobs. The financial services sector added 9,000 jobs from June to July, marking the twelfth consecutive monthly gain.

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GetZeeGold's picture



They fooled me once....I'm waiting for the revisions.


Central Bankster's picture

Gold, Silver, Copper are disliking the news.

GetZeeGold's picture



Hell.....if it's free.....I'll take some.


Bastiat009's picture

Gold hasn't liked a piece of news for a year now. The European collapse, major funds collapse, US bad news ... it seems that gold depends entirely on QE now ... but wait QE is coming ... eventually, maybe.

Jungle Jim's picture

"Any Day Now"

any day, now... it's gonna start - my real life.
and any day, now: everything is gonna be all right...
any day, now: life's gonna get real good.
and somehow: life'll be like i said it would

any day, now - mark my word!
any day, now - i will be heard!
any day, now - my ship will finally come in...
any day, now: i'm gonna jump right in.

and any day, now: my destiny will begin.
and until then i'll just be here
wasting my time...
but, don't you worry,
i'll be just fine:

any day, now - mark my word!
any day, now - i will be heard!
any day, now - my ship will
finally come in...

Debtonation's picture

Funny! Surprise indeed.  Why do people even pay attention to this "noise."  The correlation is minimal and just confuses algos.

Jlmadyson's picture

Noise indeed because we could be closer to a zero print this month than most believe.

Ted Baker's picture


azzhatter's picture

And on que- Steve LIESman says this is the most accurate set of data available

miker's picture

I still think the Fed will do some form of easing this week.  Largest reason is to help provide cover for ECB's easing.  Japan in trouble, China in trouble, Britain in trouble.  If the Fed doesn't see and act on these clear global risks, I'll be surprised.


Vincent Vega's picture

I'm not saying you are wrong but I do ponder: what's the point of more QE? Who does it benefit? At this point isn't it literally just throwing more money at the problem(s)? Every time I read about QE I wonder why I bother to get up and come to work. I mean if money is so easily created then just create some for everybody, right? I don't know what the answer(s) are but I know what the answer isn't...more QE. Having had my rant; will they QE...probably.

Mr. Bingley's picture

Frank Lautenberg's former company fluffing up the numbers for Obama? Can't be.

GetZeeGold's picture



Our position has not changed on that.


SheepDog-One's picture

Frank Lautenberg also giddily writing up gun ban legislation too....including it so fittingly in the 'internet security bill' of course.

Rikky's picture

The report is based upon algoirthims developed by Macroeconomic Advisors.  ADP only provides the data and originally created the report to improve brand recognition.  Well they improved it alright!  Another question you have to ask yourself is which algorithims are more accurate Macroeconomic Advisors or the BLS?  Many here seem to assume the BLS to be the source of truth.  Not sure I'd go with that assumption.

Jason T's picture


no country with a mcdonalds has ever attacked another country with a mcdonalds.. it's only the countries without mcdonanlds that r enemy of state..

Libya can now be our friends. 

Hype Alert's picture

Markets up on employment beats.

Markets up on employment misses.

Markets up on New QE.

Markets up on no QE.

Markets up on GDP beats.

Markets up on GDP misses.

I'm sure there's a pattern here.  I'll get back to you when I find it.

cosmictrainwreck's picture

yup - and they didn't even have the decency to wait till midnight to start ramping ES (tpically 3am-4am stealth); started goosing the bitch around 11pm.... and looks to go to da moon again/still [barring the standard head-fake play] unless....unless..... shit, I'm confused

101 years and counting's picture

+163K jobs:

+1,013,000 Temp Jobs, -850K full time jobs.

LawsofPhysics's picture

Correct.  We will continue to "beat expectations", all the way down.

booboo's picture

the Black Swan will come in the form of a NYC Sewer worker Ed Norton type cutting a the fiber optics line from the bots to the exchange. Aaaaaaand it's gone.

adr's picture

As much as they say QE3 is priced in, it isn't. If QE3 was already priced in, that would mean the announcement shouldn't cause the market to rise at all. The stocks that doubled on QE hopes should stay where they are.

We know that isn't the case. Stocks rose on the hope QE3 would give corporations more free money to buy back their own stock at a higher jumping off point, giving CEOs and directors more cash in their pockets.

The stock market exists as as an ATM for the Wall Street set. All of the fraud to prop up the fantasy is accepted, because the counterfeit operation hasn't been exposed, or at least they think.

I really don't know how you can go after a few people printing 100s in their basement, when every major corproation is doing the exact same thing. Using counterfeit books to print money.

dwdollar's picture

"I really don't know how you can go after a few people printing 100s in their basement, when every major corporation is doing the exact same thing. Using counterfeit books to print money."

To provoke an emotional response.

When a government, bank, or corporation does it people just shrug it off and say, "Oh well..."

When a neighbor does it, there's still a shock value which produces an emotional response of hatred followed by a warm fuzzy feeling that law enforcement is doing it's job to help the little guy.

Milton Waddams's picture

With Jackson Hole coming up, why would BB announce any QE today?  If there is to be future QE, BB will make the case for it / telegraph it in his upcoming JH speech.

madcows's picture

Their track record is awful.  I don't pay any attention to their numbers.  The NFP / BLS, with all their adjustments and manipulations, offers a better reading on the state of unemployment.

dwdollar's picture

Jobs are plentiful as long as you want to work for Walmart.

SheepDog-One's picture

Can we have any CEO step up on CNBC and show how he hired 1,000 or even 500 new people last month?

I didnt think so.

Byte Me's picture

"Market confused about QE" Let's see if I can clarify the position:--

Having run out of smoke, allowed HFT and bollocks accounting to crack all the mirrors, TPTB (aka Bennie and Drughi, with a little help from The King in London, Shitzizpantsalot in Tokyo and M. Irrelevant in Zurich) are out of 'bullets'

Their only VIABLE mandate is/was perpetration of the staus quo nonsense because the alternative (ANARCHY) was to be avoided at all costs.

Well. It "worked" for four fucking years -- three more than I ever dreamt it could . But now it's been running on the assumption of further QE for months, or the possibility of QE, or the hint of the possibility of QE.



Get over it -- and head for the hills - so as to speak.

q99x2's picture

I did not vote for any Bernanke to determine the health welfare and future of the US of which I am a citizen and therefore I suggest that he is hung by the neck until dead for his acts of Treason.

LoneStarHog's picture

ADP = Amerikan Department of Propaganda ... Just the civil arm of the BLS

Byte Me's picture

Seen the film 'Brazil' much?

Pasadena Phil's picture

Why are there ANY ADP revisions? Don't they just add up how many checks they paid to a specific number of discreet payees and close the books? Can't their computers add correctly? It's not like the BLS numbers which are pushed forward and backward to make the shape of the curve support the political narrative. ADP is supposed to be simple.

Meesohaawnee's picture

words cant describe how tired of this QE raping talk i am. you dont need QE when you have a short ban and you can ramp it up at will. Mommy make it stop!

orangegeek's picture

And as deflation picks up and the economy slides further and faster, organizations such as ADP (and the US Government) will be pushing data that pertains to agendas (fooling the masses into denial) rather than fact.

gookempucky's picture

ADP = almost done pissing.

With so many low wage SERVICE sctor jobs created -how come it still cost me $50 for a hummer ??? without teeth its an extra $20