(Adds details, quote)
NEW YORK Oct 24 A monthly reading of U.S.
private sector employment has been revamped to put it more in
line with the closely watched government nonfarm payrolls
Automatic Data Processing said on Wednesday it had
made the changes to its private job market report as part of a
new partnership with Moody's Analytics.
ADP's figures are typically released a couple days ahead of
the government's report. While economists use the report to
fine-tune their labor market forecasts, ADP has had a spotty
track record of predicting the initial reading for non-farm
The report will use a larger sample size and new methodology
to put it more in line with the final revised readings from the
Bureau of Labor Statistics.
"We're going to be very accurate. We're going to nail this
number," said Mark Zandi, chief economist at Moody's Analytics.
The report will now be based on 406,000 companies, up from
344,000 previously, which will take into account 23 million
employees, up from 21 million. That will capture more than 20
percent of all Americans employed in the corporate sector.
Testing the new model on data going back to 2001 showed a 96
percent correlation with the revised government figures,
according to ADP.
The report will also be broken out into more industry
categories and business sizes than before.
The changes will be in effect as of ADP'S employment report
for October, which will be released Nov 1.
The overhaul was the result of an internal project to
improve the report that was started a year ago, Jan Siegmund,
chief strategy officer at ADP, said. It also marked the end of
ADP's partnership with Macroeconomic Advisors, who co-developed
(Reporting by Leah Schnurr)