This summer, economists were predicting that 175,000 new jobs were created in June and then payroll processor ADP shared their own estimate of 368,000 with the markets.
In a panic, mortgage rates moved higher because - well, what if ADP was right?!?
The actual figure turned out to be 121,000.
That major miss jolted the markets because it had suddenly wondered if ADP knew something "inside". After all, ADP is one of the largest payroll processors in the world and people believed that they might have the inside track to know if companies were adding jobs to the economy.
But, they didn’t.
Naturally, it’s big news that ADP is predicting that 40,000 jobs were lost in December 2006 versus economists’ predictions of 115,000 jobs were created.
Mortgage bonds have staged a small rally and mortgage rates are retreating as markets wonder once again — what does ADP know?
They won’t have to wait long to find out because the government’s job report is released at 8:30 EST Friday.
