ADP vs. Department of Labor Data: No Rhyme or Reason

Each month, ADP presents its estimate of what the Labor Department will report a day or two later. It’s like a publicly available economist’s estimate, yet the stock market and the popular press anticipate it and react to it as if it were a reflection of an economic reality. If it were perhaps more accurate, or rather more reflective of the data the government reports (which may or may not be accurate), then it might move the market, but the data has lost its punch over the years.