I’d say “yes”. From RealClearPolitics:
So, if the BLS job numbers are so unpredictable, and we employ so many people to compile them, why do we pay so much attention to them? The answer is that we are all trying to guess what lies ahead for the economy. Uncertainty is bad for business. But numbers which have to be revised time after time make predictions about the future less certain.
Fortunately, the private sector offers us alternatives. If an independently produced number collected in the private sector—from Automatic Data Processing (ADP) —is as good as the CES, why doesn’t the government just use the ADP data? Payroll providers like ADP offer a robust and more agile alternative for tracking labor market activity. In addition, the correlation between the results released by ADP and the CES are usually positive. Moreover, the ADP data release predates the CES release by two days.
Out of roughly 160M employees in the workforce, ADP manages 30M workers and uses all 30M data points in their release versus a sample of 100,000 or so businesses used by the BLS. Yes, one could argue that we still need the BLS to “sample” the other 80%, but I’m not persuaded that is the case. Our society is very interconnected, and it is entirely reasonable to think that, with some variation, the behavior of 30M actual employees gives us a very good indicator of the overall employment picture.
Thus, data from sources like ADP are effectively rendering the BLS numbers redundant, or at best supplemental. …
Dr. Mateer would do well to learn something about the data series he is discussing. I plot three series on private nonfarm payroll employment: the BLS’s CES, ADP’s, and the Quarterly CENSUS of Employment and Wages.
Figure 1: Private nonfarm payroll employment from CES, s.a. (blue), from ADP, s.a. (tan), and covered private nonfarm payroll employment from QCEW, n.s.a. (green), in 000’s. Source: BLS, ADP via FRED, BLS.
While ADP and CES series comove, they are hardly exactly the same. Dr. Mateer then makes an odd statement:
Consider the stark difference in June 2025, when ADP reported that private employers slashed 33,000 jobs, while the BLS reported an incorrect gain of 147,000 jobs. While methodological differences certainly play a role in such discrepancies…
Well, in point of fact, it’s the coverage that differs which drives the differences. ADP covers firms that use ADP’s services. That means their numbers will not cover large (or other) firms that do not use their services. ADP covers people on the payrolls even if they couldn’t work. BLS counts whether they are working in the reference week. Those are not methodological differences. They’re differences in what’s covered.
Furthermore, the statement that “BLS reported an incorrect gain of 147,000 jobs” is just sloppy reasoning, or at least sloppy language. We don’t know what the actual number is — and if one understood just an eensy, teensy bit of statistics, one would know that since given sampling, we never know the true statistic (we just hope the sample mean converges to the population mean) . Just because the June number was revised doesn’t mean that June number in the current vintage is now the correct one. The June number will again be revised with the August release. It’ll be revised again with the benchmark revisions. So it’s too early to say the 147K gain is “incorrect”.
Dr. Mateer also suggests “Instead of promoting the headline number, the BLS should provide a confidence interval”. That could be done, but in point of fact, BLS provides lots of information regarding standard errors (spreadsheet), also the revision sizes: In other words, BLS procedures are (sometimes mind-numbingly) described. For ADP, some of the compilation is proprietary, and not completely transparent.
FInally, a point that applies generally: private agents have their own agendas for compiling data. ADP has data as a byproduct of its activities. But it doesn’t have as an objective tracking the entire labor market, just the private nonfarm labor market that it services. And, who has an interest in compiling accurately the number of people employed (as opposed to number of jobs). That’s collected by the CPS, but I don’t see who naturally would step into the breach.
Going further afield, who has an interest in collecting NIPA data? I say, eschew the glib claims that “the private sector” can, or will, assemble the requisite data. As a public good, it will generally under-provide.
Mateer also asserts, “Instead of promoting the headline number, the BLS should provide a confidence interval.” Sigh…They do:
https://www.bls.gov/cps/methods/calculating-standard-errors-and-confidence-intervals.pdf
Reading Mateer’s entire text reveals a great deal of motivated logic, bias, supposition and slop. Mateer is providing backup for an article by John Tamny, who’s providing support for E.J. Antoni. It’s echo chamber stuff.
Funny thing is, Mateer takes a paycheck for teaching economics, and is cheerleading for Tamny, who claims economics is a bunch of nonsense. Politics makes strange bedfellows.
Regarding JOLTS confidence intervals, you don’t have to pry it out of a spreadsheet. The BLS publishes it every month in plain text here, in the Employment Situation Technical Note :
https://www.bls.gov/news.release/empsit.tn.htm
“the confidence interval for the monthly change in total nonfarm employment from the establishment survey is on the order of plus or minus 136,000.”
Note that the two corrections for May and June were within the 90% confidence interval.
Hey, remember a few years back when the marketing trope was that every company had to claim they were now somehow using blockchain? “Campbells Soup — now with blockchain!” It became an internet joke. Well, the joke’s on us.
Howard Lutnick announced that Commerce Department data will now be issued on the blockchain. GDP, PPI, Trade Index will now be blockchained.
Why? “Because you are the crypto president, sir!”
What does putting data “on the blockchain mean”? Nobody knows. There is no purpose to this announcement other than to promote Trump’s crypto scams.
I think the real thing that matters here is that the ADP data relies on the QCEW to give its national number. Without those weights, you could not scale the ADP data to get a national number (or regional number for that matter). Additionally, ADP does not appear to release any metro-level data*, which is much more important for many employers than the national number: where the jobs are still matters!
An interesting alternative to ADP that is going to have a “new” release for the first time is Revelio: https://www.reveliolabs.com/public-labor-statistics/. They use linkedin/indeed and other profile data to track company headcounts. Of course, they also rely on things like the QCEW and the occupational data from the BLS to transform their raw profile data into something more representative (e.g. profiles change less often than payrolls, certain jobs are less likely to have profile data, etc.). Useful to track, but not a full alternative. And labor market data is a public good! It will be drastically undersupplied (overcharged) by the private sector compared to its usefulness to the economy.
*They do appear to clean it as they have a blog post with metro-level wage numbers: https://www.adpresearch.com/assets/the-geography-of-recent-u-s-wage-growth/. Additionally, I have seen (but can’t find at the moment) large companies release local numbers based on “private payroll records,” which I assume is ADP. I have also seen data vendors (e.g. Markerr) selling “private payroll records” without attribution, which – again – I assume means they are cleaning raw ADP data and reselling it.
Do we need facts and do we need to fully understand what is happening. The same question as in: do we need government to have competent professionals in mid and top level leadership positions. We are coming up on the 20’th anniversary of Katrina, which provided a clear answer to that question. Yes we do because things can go very bad if we don’t.
why would somebody want to take ADP in place of the government numbers? ADP is not a comprehensive representation. it is a subset of the economy. why would one want to use this subset to determine economic policy for the entire nation? seems that would be a poor choice.
furthermore, why would the government rely on statistics provide by a private enterprise? nobody is paying ADP for the statistics. nobody is holding their accounting to be accurate or ethical. it is simply a number that pops up on a web site for free. what if they decide it is no longer in their interest to publish the result? what if they decide to modify how the make their calculation? who is there to make that process be transparent? seems there are numerous reasons why ADP should not be used as the justification for shutting down the labor department work. only a fool would argue otherwise.
speaking of conflicts of interest, does it not seem striking that the heir to a home building empire is using his perch as leader of us housing policy to push the fed to lower interest rates for the purchase of new homes via mortgages? obviously the pulte family has no stake in that outcome.
ADP covers only about one-fifth of private employment. It does not cover federal or state employment at all. It covers mainly very small employers who do not have the capability of hiring one or two people to run their own payroll services. It doesn’t cover large corporations at all.
ADP, representing small businesses, can be a bellwether for economic trends but it is far from a comprehensive picture.