ADP Job Report Faces Scrutiny as Public Sector Gains Highlight Uneven Labor Market Recovery

A scene from Mean Girls—“DO NOT TRUST HER”—is used as a cheeky warning to cast doubt on the credibility of the ADP jobs report. While acknowledging the ADP’s role in processing payrolls, the article urges readers to be cautious when interpreting their monthly employment data. The stark contrast between ADP’s figures and official labor statistics raises concerns about its reliability.

Contrasting Job Reports Highlight Public-Private Divide and Complexity in Employment Data Interpretation

In June, the U.S. Bureau of Labor Statistics (BLS) reported a stronger-than-expected increase of 147,000 jobs, while ADP’s report showed a decrease of 33,000 private sector jobs. This wasn’t just a minor discrepancy; the two reports pointed in completely opposite directions. Meanwhile, the unemployment rate dropped to 4.1%, defying predictions of a rise, adding to the confusion between the two data sources.

Although the ADP report seemed off at first glance, deeper analysis reveals some justification. Notably, government jobs surged by 73,000 in June, accounting for about half of the total job gains. Since ADP only tracks private sector employment, it wouldn’t reflect this significant public sector boost. Thus, the contrasting reports may be highlighting different slices of the labor market rather than offering directly conflicting data.

Job Gains Concentrated in Few Sectors, Broader Market Shows Signs of Uneven Recovery

Economists caution that the overall employment gains may not reflect a universally healthy job market. According to Cory Stahle from Indeed Hiring Lab, many of the gains came from specific sectors like healthcare, local government, and public education. For those seeking work outside these areas, the employment outlook might still feel stagnant, pointing to a more nuanced and divided labor market than headlines suggest.

Aside from jobs data, other notable developments include record highs for the S&P 500 and Nasdaq, a rise in 10-year U.S. Treasury yields, and mixed trading in Asia-Pacific markets. In international affairs, India temporarily banned Jane Street for market manipulation, and a major tax-and-spending bill backed by President Trump narrowly passed in the House. Meanwhile, UK Prime Minister Keir Starmer faces mounting pressure amid stagnant economic growth and challenging labor conditions at home.