A Tale of two U.S. reports: Who's right?

Did anyone hear that 'whoosh' sound Friday morning?

That was the air rushing out of the U.S. jobs balloon after the Bureau of Labour Statistics reported that a mere 113,000 jobs were added to private payrolls last month.

On it's own, the number might not have been that surprising. But, expectations were certainly much higher after Automatic Data Processing Inc. suggested on Wednesday that private payrolls increased by 297,000 in December, leading some to question as to whether the ADP reports are even remotely credible.

Economists Pierre Lapointe and Alex Bellefleur of Montreal-based Brockhouse Cooper are not surprised by the numbers, "but the divergence has never been as high as now."

The brokerage firm has produced a chart (attached) showing the discrepany between the two measures of U.S. employment.

The report goes on to show that, over the long term, the ADP and BLS numbers are largely twinned (see second chart). They also note that, "recent BLS payroll reports were all subsequently revised upwards (sometimes sharply)."

"The true trend level in U.S. employment probably lies between ADP and BLS numbers," the report said.