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ADP Private payroll came in today, beating expectation by 5,000 jobs at 178,000. The big surprise came when ADP revised the month of June higher by 35,000 to 191,000. The BLS gets its chance to report on Friday morning at 8:30, analysts are currently looking for 178,000 jobs created in July. Predicting the BLS data is anyone’s guess, but it is fun to try. My models suggest that consensus may be too low.
BLS Trending Lower
The chart above has been converted to y/y percentage changes to help us smooth the data out and get a clear view of the trends. The chart is demonstrating the down trend with the red straight lines. The private payroll numbers broke that downward trend around the start of 2017, but to this point it is uncertain the same has finally happened with BLS.
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For there to be 177,000 jobs created in June, there needs to be a 1.47 percent increase in the number of people work versus July 2016 in the non-farm payroll population.  It would also mean that the BLS will continue to fewer jobs created into the future. Also, it would create the largest spread between the ADP and BLS y/y percentage changes the widest in 5 years.
Consensus Too Low
For the best chances of the BLS breaking the downward trend, the BLS report needs to come in at or above 234,000 jobs created in July. From looking at the pattern, and the spread, it is my belief that the recent consensus numbers are likely too low, and we could see a number of 234,000 created in July.
We’ll have to wait and see come Friday.
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