No jobs report? Try these alternatives

Welcome to a funky new spin on Jobs Friday. With the government shutdown still going strong, the Bureau of Labor Statistics did not release its monthly employment report this morning, which sent everyone scrambling to figure out what’s up with the jobs picture in the US.

With no government data to parse through, investors are turning to reports from private companies to understand labor market dynamics. This week…

• Payroll-processing giant ADP reported that US private sector employers lost about 32,000 jobs in September, the largest drop in two and a half years.
• Meanwhile, Indeed found that job postings fell to their lowest levels since February 2021.
• On the glass half-full side, Revelio Labs, which analyzes job networking platforms, estimates that the US actually gained 60,000 jobs in September.

Roll all that together into a makeshift data burrito, and the general consensus from FactSet is that the US economy added 50,000 jobs in September (an improvement over August’s 22,000 gain) and that unemployment held steady at 4.3%.

These new numbers are helping economists and investors navigate a treacherous moment in the US economy.

“The question right now is: Why is the labor market weak when everything else is good?” Apollo Chief Economist Torsten Slok told the Washington Post. “Now not only do we not have data, we don’t have data in a situation where there are some very significant signals coming from the labor market.”

Who can you trust?

While everyone’s pouncing on third-party jobs data today, the reality is that investors have been using it for years to complement more comprehensive official statistics, sleuthing for clues in business surveys, railcar loadings, even demand for cardboard boxes.

Even the Federal Reserve has used ADP data and praised its “high information value.” ADP beat the BLS to predicting labor market weakness when it forecast a decline of 33,000 jobs in June. The BLS, on the other hand, initially announced strong growth of 147,000 jobs that month, which was later infamously overhauled to a loss of 13,000 jobs.

Bottom line: Private jobs data might be faster and flashier, but it has significant gaps, which is why third-party providers won’t replace government statistics anytime soon (at least not permanently). For now, though, they’ll provide just enough sustenance to get us through this Jobs Friday, much like nachos and beer for dinner.—JD