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ADP payrolls

  • #1
  • First Post: Oct 4, 2006 6:38am Oct 4, 2006 6:38am
107k previous for the ADP and 128k previous for non farm. 125k expectations for non -farm so I am assuming that expectations should be 105k - ish for this ADP.
Profit is where readiness meets Opportunity
  • #2
  • Oct 4, 2006 7:16am Oct 4, 2006 7:16am
Forecast : 110K
Result : 78K

Will NFP follow the same direction? Hhmmm...
  • #3
  • Oct 4, 2006 7:20am Oct 4, 2006 7:20am
NEW YORK, Oct 4 (Reuters) - U.S. private employers added 78,000 jobs in September, well below economists' forecasts, a survey by a private employment service said on Wednesday.

That said, only 8 analysts were polled by Reuters. Most don't have a forecast for this data because the ADP is a poor indicator of the NFP...it has really only come on to the radar over the last couple of months, but is of limited use. We'll see if it has any impact on the derivatives auction price of NFP closer to the time.
"Always bet on black"
  • #4
  • Oct 4, 2006 7:20am Oct 4, 2006 7:20am
ADP is one of the best source to FADE the news (unless it was July's ADP)...

Darn, I missed it!
  • #5
  • Oct 4, 2006 7:21am Oct 4, 2006 7:21am
Equally interesting is the fact the there was no dollar down move on that data.
Profit is where readiness meets Opportunity
  • #6
  • Oct 4, 2006 7:21am Oct 4, 2006 7:21am
and $ is not moving. Why?
  • #7
  • Oct 4, 2006 7:23am Oct 4, 2006 7:23am
Quoting abobtrader
NEW YORK, Oct 4 (Reuters) - U.S. private employers added 78,000 jobs in September, well below economists' forecasts, a survey by a private employment service said on Wednesday.

That said, only 8 analysts were polled by Reuters. Most don't have a forecast for this data because the ADP is a poor indicator of the NFP...it has really only come on to the radar over the last couple of months, but is of limited use. We'll see if it has any impact on the derivatives auction price of NFP closer to the time.
Someone posted a corrollation chart of ADP vs. Non Farm, but I can't remember where. As I recall, there was a strong corrollation in direction but not in magnitude.
Profit is where readiness meets Opportunity
  • #8
  • Oct 4, 2006 7:25am Oct 4, 2006 7:25am
I guess traders still respect NFP more compared to this report....

Quoting lietuve
and $ is not moving. Why?
  • #9
  • Oct 4, 2006 7:29am Oct 4, 2006 7:29am
At least a little bit respect would be helpful...
  • #10
  • Edited 7:58am Oct 4, 2006 7:30am | Edited 7:58am
Jun ADP 100K+
July ADP 300K+ USD+
Aug ADP 70K+ USD-
Sep ADP 100K+ USD+
Oct ADP 70K+ USD-

July NFP USD-
Aug NFP USD-
SEP NFP USD+
Oct NFP ???

ADP missed predicting July. But went on to correctly predict Aug and Sep
  • #11
  • Oct 4, 2006 7:35am Oct 4, 2006 7:35am
I shorted today and ... what? On Friday will be kill of innocent... as always
  • #12
  • Oct 4, 2006 7:41am Oct 4, 2006 7:41am
ADP results are here.
  • #13
  • Oct 4, 2006 7:43am Oct 4, 2006 7:43am
This month's ADP report:

http://www.adpemploymentreport.com/P...ept_Report.pdf

Archive with the previous reports:

http://www.adpemploymentreport.com/r...s_archive.aspx

EDIT:

wallym you beat me to it! LOL!
  • #14
  • Oct 4, 2006 8:02am Oct 4, 2006 8:02am
Quoting FXopportunist
Someone posted a corrollation chart of ADP vs. Non Farm, but I can't remember where. As I recall, there was a strong corrollation in direction but not in magnitude.
That's so true. The ADP is a relatively new in that is has only been started being made public in recent months, but there is a good backlog of data against which to compare. While the correlation is good (90%), the magnitude prediction is weak - remember the ADP reading of 368k that failed to live up to expectations? (The folks at TickerSense calculate the correlation to be closer to 80%, and see it offering a marginal-to-no-better insight on the final NFP number than the consensus).

The below chart shows the deviation between NFP and ADP. It looks like the average deviation is more than 50k.
Attached Image
"Always bet on black"
  • #15
  • Oct 4, 2006 8:10am Oct 4, 2006 8:10am
How do you interpret this ADP number anyways?

I personally dont compare the numbers but the direction (as shown on my above post). Likewise, I try to compare the deviation of each ADP to the deviation on NFP.
  • #16
  • Oct 4, 2006 8:31am Oct 4, 2006 8:31am
Quoting BurgerKing
How do you interpret this ADP number anyways?

I personally dont compare the numbers but the direction (as shown on my above post). Likewise, I try to compare the deviation of each ADP to the deviation on NFP.
Hello BK,

What myself and abotrader are saying is: DON'T.

There is a good direction corrollation but not magnitude. The deviation information in the numbers is not historically reliable.
Profit is where readiness meets Opportunity
  • #17
  • Oct 4, 2006 9:48am Oct 4, 2006 9:48am
I understand.

I personally am not confident to trade ADP predictions. My above interpretations were merely "studies", surely insufficient for live trades.

i'd still stick myself with straddling NFP and a quick "market order" for the reveral. both my brokers suck slow!
  • #18
  • Oct 4, 2006 11:10am Oct 4, 2006 11:10am
interesting spike this morning, I am assuming from the ADP report. At work and cannot verify without access to my account.

If I remember correctly, this report has yet to show any correlation to the NFP report. But, I'm often wrong. My teenagers have informed me that, in fact, I am almost always wrong.

The question is, How can I gain profit with the knowledge that I am usually wrong? And, how can I backtest it?

Anyway, I certainly have no confidence that the ADP report can, in any way, forecast the NFP result. Does this help anyone?
  • #19
  • Last Post: Oct 4, 2006 12:38pm Oct 4, 2006 12:38pm
Quoting squat1962
The question is, How can I gain profit with the knowledge that I am usually wrong? And, how can I backtest it?

squat1962, if you will kindly tell me which direction your trading, i will put in a reverse trade. Unfortunetly, Murphy's Law will always stipulate that i will lose also. So i guess this is a lose lose situation. Never mind, i will keep feeding my broker my blood, it always seems to grow larger and hungrier the more i feed it. (Feeeeeed me Seeeeeeemore).
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