The disappointing ADP figure doesn’t bode well for Friday’s much-anticipated April employment report. Economists expect U.S. non-farm payrolls to rise by 170,000. That would be an increase from March, which shocked the markets with a paltry 120,000 jobs added. The graphic below highlights the strong correlation between the ADP survey and the Labor Department’s report.
Over the past 10 years the two have moved in lockstep 93% of the time, according to an analysis by FOX Business. While the actual numbers reported sometimes differ by a wide margin, they have a very strong tendency to move in the same direction. Based on this historical relationship, it shouldn’t be a surprise if Friday’s non-farm jobs figure comes in significantly below the 170,000 estimate.