If you like your 'disappointing' government-sponsored wage growth data, you can keep it... [6] but if you are an ambitious talking-head economist looking to boost confidence in the economy in the hopes of a career in the administration, then ADP has just the 'tool' for you. Behold, the "ADP Workforce Vitality Index" - which measures the total real wages paid to the US private sector workforce [7], implying that the BLS is not measuring wage growth correctly as it is actually notably higher. In Q3, the ADP data grew 0.77% which they argue "is a good sign that may lead to increased consumer spending and a boost for the economy," and implicitly means The Fed should be hiking rates sooner as ADP warns "real wages are accelerating." Zandi the optimistic hawk?
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Thus - Fed narrative confirmed: wage growth is accelerating and this is justy the excuse The Fed needs to exit QE and start tightening policy... because they know just how impotent they will be if another recession or slowdown or market crash occurs with rates at zero and markets more dovishly positioned than actual policy.
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In conclusion, just as the PMIs are used and abused to fit whatever narrative is necessary to maintain the status quo of easy monetary policy OR "tighter policy because the economy is rebounding so well", we suspect ADP's efforts here are more of the same... given enough economic indicators, even a monkey can find reasons to be dovish forever or hawkish right now.
