What is the ADP employment report?

The ADP National Employment Report is a monthly estimate of private-sector employment changes in the United States, produced by Automatic Data Processing, Inc. in collaboration with Stanford Digital Economy Lab. Because ADP processes payroll for roughly 25 million US workers, it has access to one of the largest real-time datasets on employment and wages in the country. The report is released on the Wednesday before the first Friday of each month, two days ahead of the Bureau of Labor Statistics' official Employment Situation report.

The ADP report breaks down employment changes by establishment size (small, medium, large businesses), industry sector, and region. This granularity can provide useful color about where job growth is concentrated or contracting. The accompanying ADP Pay Insights data also tracks median wage changes for job-stayers and job-changers, providing a timely read on wage dynamics that complements the BLS average hourly earnings data.

Historically, the ADP report has been an imperfect predictor of the BLS nonfarm payrolls number. The two measures use different methodologies, sample frames, and seasonal adjustments, and they frequently diverge by 50,000 or more in any given month. ADP revised its methodology in August 2022 to improve accuracy, but substantial month-to-month discrepancies persist. Market participants have learned to treat ADP as directionally informative rather than a precise forecast of the official number.

Despite its limitations, the ADP report moves markets because it is the last significant jobs data release before the official BLS report. A large beat or miss relative to expectations can shift Treasury yields, equity futures, and dollar positioning as traders adjust their estimates for Friday's payrolls number. For longer-term analysis, the ADP data is useful for identifying trends in private-sector hiring before revisions to BLS data confirm or contradict the picture.