"Fed's Megaphone": Fed Loses Access to "Small Non-Farm" Employment Data

On October 23, “The Fed's Mouthpiece” Nick Timiraos wrote that Fed officials have recently lost access to employment data provided by third parties. Since 2018, payroll processing company ADP has been providing the Fed with a set of anonymized employment and income information covering 20% of the U.S. private sector workforce, and the Fed typically receives this data with about a week latency, making it a timely and comprehensive measure of the employment market conditions. Sources revealed that after Fed Governor Waller made remarks at the end of August that drew public attention to the Fed's long-term use of ADP employment data, ADP ceased providing this data to the Fed. The specific reasons for this change remain unclear. In Waller's remarks, he cited ADP's data in an accompanying footnote, further expressing his concerns about the slowdown in the labor market. The footnote indicated that preliminary estimates show that summer hiring conditions have continued to deteriorate, and the data's time frame exceeds the coverage period of the latest government data. ( Jin10 )