Friday, December 03, 2010

ADP vs. BLS Who Do You Trust?: November 2010

Comparing the private nonfarm payroll estimate from ADP, a national staffing and business services firm, to the BLS results, you can see that an unusual divergence has shaped up over the last year.

These two series paint starkly different pictures of the supposed “recovery”.

While the ADP series indicated a similar decline and bottoming period to that seen in the BLS estimate, the trends for both series since early 2010 have been very different.

The ADP series indicates and extremely weak recovery, so much so that it hardly looks like a recovery at all.

So who is right, the administration/BLS with their “V”-shaped “recovery” or ADP’s assessment showing an anemic and faltering economy?

Looking at the chart (click for full-screen dynamic version) you can see that these two series have never been this far out of whack.