ADP Shows 8000 Lost Jobs In September, Ahead of Friday’s BLS Report Calling For 105k Jobs Lost

Today, ADP, a provider of payroll services to more than 24 million Americans employed in the private sector, released their monthly jobs data which showed that the economy lost 8,000 jobs in September. The expectations were for a loss of 53,000 jobs. Despite drawing from data based on 399,000 business representing about 24 million people on payrolls, ADP reports have been way off most months this year relative to the official government jobs report produced by the Bureau of Labor Statistics. For example, August ADP showed -33,000 jobs then a few days later August BLS showed -84,000 jobs. Bloomberg had another example, saying that for the first eight months of 2008, ADP reported -29,000 private sector jobs and the BLS reported -758,000.

Expectations for Friday’s BLS jobs report call for -105,000 jobs. The jobs report has a large impact on markets, and mortgage rates always move on this report since it’s such a broad measure of the economy, covering consumer strength, unemployment and wage inflation.

We think the job loss trend will continue as measured by the BLS report, and that rates will be the same or lower. It’s hard to bet that rates will go too much lower because mortgage bonds are overbought this week following a drop in oil prices and the Fannie/Freddie takeover by government. Bonds have rallied strongly on that news, and have gained additionally on the imminent government bailout package for Wall Street.