An analysis of payroll data released on Wednesday showed an increase in private-sector employment of 189,000 during November, significantly above market expecations…The number was more than twice the 65,000 rise expected by analysts.
Too many folks to count were surprised by this, and I’m not sure why. First, there’s a flood of temporary workers being used to cover extended retail store hours, and they get counted. Second, “analysts” perpetually sandbag any number they can get their teeth around, so when the actual data gets published the equity markets rally on the good news. And I found no mention of the margin of error in ADP reports, which I believe is something like + or – 160,000.
As for productivity, well if you sack workers and make the remainder carry the incremental workload, productivity is bound to go up.
UPDATE: Barry Ritholtz thinks it’s modeling error.
UPDATE 2: An unmassaged view. I guess few post to Monster for temp jobs.
UPDATE 3: The Labor Department has now released its numbers, but who’s take are you going to believe: Bloomberg says the 94,000 additions were greater than forecasted, while the AP said the number disappointed economists. I think it’s just a battle for the Fed’s attention, and now that the equities market has recovered so nicely, we don’t need a rate cut eh?