By Karl Smith
ADP released its new benchmark series today. The headline number has private sector jobs growing at a strong 200K clip in January, but dramatically from our perspective, the entire series is moved up by over 600K.
Notice also how the blue line had U.S. private sector job growth decelerating after March 2011 – the BLS benchmark date that ultimately benchmarks ADP as well. Now the red line has U.S. job growth decelerating after March 2012.
This is the tell-tale sign of a set of series, which remains behind the curve and repeatedly tells us it was “most off trend” on the very date it was hand-checked against the data.
It is unlikely that the strongest outlier also happens to be the most robust data point. More likely is that your estimation procedure is biased downward. Of course, I mean bias here in a strictly statistical sense, and not in any sociological or psychological sense.
We should expect that the strong trend moving through the beginning of 2012 is eventually revised into a straight-ish line, probably adding another half a million or so jobs to our 2012 estimates.