CNBC.com Senior Writer
Revisions to the way payroll data firm ADP counts private sector job creation have resulted in a sharp drop in the September employment count.
ADP's
new calculations put the monthly job creation at just 88,200, down from
the 162,000 the firm originally reported earlier this month.
The
firm recently has entered into a partnership with Moody's Analytics
that will change the way the private payroll count is calculated.
The new private payroll count now is actually under Labor's September job creation household survey net total of 114,000, 104,000 of which came from the private sector.
The
unemployment rate dropped last month to 7.8 percent. Separately, as the
government's establishment survey said the total number of new
private-sector workers swelled by 873,000. (Read More: Consumer Prices Rise on Energy Surge; No Pay Gains)
Economists expect Friday's report to show 125,000 new jobs and the jobless rate to hold steady.
When
the Labor Department revealed its September job count, it sparked
criticism from some quarters that the numbers were being manipulated for
political purposes as the November presidential election drew near.
The
soft ADP count could add credence to those who believe the pace of job
creation is slower than the government's numbers indicate.
"It's
huge, no doubt about it," said Todd Schoenberger, managing principal at
the BlackBay Group in New York. "Their changing the methodology tells
me that if the number is cut in half with that revision, then the
revision we're going to see Friday is going to be a disaster."
Moody's economist Mark Zandi did not return a request for comment.
Former General Electric [GE
21.34
0.28
(+1.33%)
]
CEO Jack Welch caused a skirmish after the September jobs report was
released when he said on Twitter, "Unbelievable jobs numbers...these
Chicago guys will do anything...can't debate so change numbers." (Read More: Jack Welch Defends His Jobs Report Comments (Again))
ADP will announce its October count on Thursday, with the Labor Department to follow on Friday.
ADP
usually releases its report on the Wednesday preceding the first Friday
of the month, but held off because of damage from Hurricane Sandy. The
firm is expected to announce a further revision to the September count
along with its October totals. (Read More: Damage From Sandy? What About Potential Economic Boost?)
In
announcing the partnership Oct. 24, the two firms said the partnership
will help align the private sector job count with the Labor numbers.
At
the same time, the new reports will provide a more detailed breakdown
of the numbers while expanding the total of businesses that participate.
ADP occasionally has come under criticism for releasing data that is often widely disparate with the government's final count.
Comment: Today, Friday, a new jobs report is out. I am no longer amazed at the depth of this administration or the MSM to fabricate data results and/or interpretation. Clearly, this current report indicates the deception of jobs numbers for the previous election cycle; YET, no one seems phased by it. Where are the stories? As we head into the final weekend before the election those who are still not sure who to vote for, become an intelligent, fact-based voter.
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