New ADP Data Comes At An Opportune Time (1/2)

After a summer hiatus, ADP's monthly private-sector employment report returns today (0815ET / 1315UK) with a new methodology that incorporates a broader set of data and that will provide a new indication of pay growth. (Info from ADP is below.)

• The current macroeconomic backdrop (and upcoming FOMC decision) means wage and job creation data is as important as it has ever been - so the new ADP report comes at an opportune time, and will be closely eyed especially for any insights into wage dynamics.
• Bloomberg reports a median consensus of +300k (160-370k range) but it's unclear what those estimates are based on given we don't have details on the new methodology and can't yet benchmark from previous years' estimates.
• ADP has historically been seen as a somewhat useful indicator of the upcoming nonfarm payrolls release, but by the same token it hasn't been seen as particularly reliable. Prior months were often revised significantly due to their methodology (which was heavily model-based).
• Today, ADP is set to release detailed info including 12 years of historical data (both monthly and weekly), and median annual pay growth. From the ADP release:
• • "Jobs Report -- Based on anonymized and aggregated payroll data of over 25 million U.S. employees, this independent measure will detail the current month's non-farm private employment change and deliver weekly job data from the previous month. Data will be broken out by industry, business establishment size, and U.S. census region. Historical data from the previous 12 years at both monthly and weekly frequencies will be benchmarked and available at launch."
  • "Pay Insights – ADP's new pay measure uniquely captures the salaries of the same cohort of almost 10 million individual employees over a 12-month period. The new monthly measure will report median annual pay growth by industry, business establishment size, U.S. region, gender, and age. Quarterly reports focused on pay will expand on key areas of interest, such as bonuses, benefits, and gender gaps."