What's Happening?
The ADP National Employment Report has undergone a significant revision, altering employment data dating back to 2010. The revised data, released by payroll processor ADP, shows erratic and substantial month-to-month job gains and losses that differ greatly from previously released figures. This revision has rendered the report unreliable for tracking employment trends. The changes include discrepancies such as job declines in early 2025, where previous data indicated gains, and larger job gains in the latter half of 2025 than initially reported. The revisions extend back to 2010, with the entire data set adjusted downward by approximately 2.5 million jobs. ADP attributes these changes to an annual revision aligning with the Quarterly Census
of Employment and Wages (QCEW) benchmark data, produced by the Bureau of Labor Statistics. The QCEW is considered the gold standard for U.S. payroll data, though it lags due to its reliance on quarterly tax filings.
Why It's Important?
The revision of the ADP Employment Report has significant implications for economic analysis and policy-making. As a widely used indicator of employment trends, the report's unreliability could affect economic forecasts and decisions by businesses and policymakers. The discrepancies in job data may lead to misinformed strategies regarding labor market interventions and economic planning. The alignment with the QCEW benchmark aims to improve accuracy, but the lag in data availability could still pose challenges. Stakeholders relying on timely and precise employment data may need to adjust their reliance on the ADP report, potentially seeking alternative sources for more immediate insights.
What's Next?
Moving forward, stakeholders may need to reassess their use of the ADP Employment Report for real-time employment insights. The reliance on QCEW data, while more accurate, introduces delays that could impact timely decision-making. Businesses and policymakers might explore additional data sources or methodologies to complement the revised ADP figures. The Bureau of Labor Statistics' nonfarm payrolls data, adjusted annually to the QCEW, may gain prominence as a more reliable indicator, despite its own limitations. The ongoing need for accurate and timely employment data will likely drive further innovations in data collection and analysis.
