Limits of ADP payrolls as an indicator

The US labor market is, rightly, a key focus. Low fear of unemployment gave US consumers the confidence to reduce savings rates. That reduction in savings rates has paid for the US consumer price increases since April, sustaining spending. The November ADP payrolls data showed labor market weakness. The ADP numbers do not necessarily have a strong relationship with reality, but the weakness increases the focus on today’s weekly initial jobless claims data.