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The monthly release of the ADP Payrolls report only began in late 2006, but it definitely gets its fair share of attention given that it always comes out two days prior to the even more closely-watched nonfarm payrolls report. Economists were looking for today's ADP Payroll report to show job growth of 176,000, but the actual number came in much lower at just 38,000, making this the third biggest miss for the report in its short history.

In the table below we highlight how the nonfarm payrolls report did versus expectations following the weakest ADP reports on record. As shown, the two ADP misses that were bigger than today's miss were actually followed up with two better than expected payrolls reports. Back in January 2007 (the December report), the ADP estimate was for +116,000 jobs, and it actually came in at -40,000. The nonfarm payrolls number that came out two days later was then estimated to come in at +96,000, and the actual number came in at +167,000.

At the moment, the consensus estimate for this Friday's nonfarm payrolls number is at 170,000, but following today's ADP report we are already beginning to see that number fall quite a bit.

Source: Biggest ADP Payroll Misses and Subsequent Nonfarm Payrolls Results