Moments after the outlier ADP private payrolls jobs number, the highest since November 2012, was released Gallup offered its own poll-based take on the US jobs market with the release of its monthly US Jobs Creation Index [4]. To some this useful datapoint may explain the ADP-reported surge in hiring, although a more nuanced read simply add to the confusion.
According to the headling job creation index, June saw a +27 print, the same as May, and tying the highest score of job creation in the six year history of the index. Here is how the index measures "job creation":
Gallup's Job Creation Index is a measure of net hiring activity in the U.S., with the monthly average based on a nationally representative sample of more than 16,000 full- and part-time workers in June. As was the case in May, June's +27 index score is based on 40% of employees saying their employer is hiring workers and expanding the size of its workforce and 13% saying their employer is letting workers go and reducing the size of its workforce. Another 41% report no change in staffing.
This is what the index has looked like since inception:
[5]
So on the surface this is great news, and corroborates the ADP print, further laying the case for a consensus beating NFP print tomorrow.
However, Gallup also reported the components of the broader Index: namely non-government, or private jobs - those allegedly tracked by ADP - as well as government workers. This is what Gallup reported:
The Job Creation Index score among government workers increased four points from May, resulting in a net hiring score of +18 for June. This score is the highest since the +16 in August 2008, when Gallup first began to measure government employment. The index score increased in June among federal, state, and local government workers, though state and local government workers continue to report a more positive hiring situation than do federal workers.
What about non-government workers? The Job Creation Index score among nongovernment workers registered at +28 for June, a decline from the 29 registered in May.
And visually:
[6]
In other words, job creation in the US was scorching hot in June.... among government workers. Meanwhile the private job arena actually posted a relative decline in hiring intentions, which clearly conflicts with what ADP reported was a surge in private job additions in June. Gallup's own conclusion: "After five months of U.S. workers reporting increased hiring at their workplaces, June's index score maintained the level from May. June's score could represent a brief halt in the consistent increases in the index so far in 2014, but it could also signal that job creation perceptions are leveling off after a five-month period of progress for the job market."
So what does this conflicting data mean? Simple: the BLS random number generator will be busy today (supposedly Yellen will know the NFP print when she speaks today at 11 am) ahead of its public dissemination tomorrow.
