Fed loses access to "small non-farm payroll" data

Nick Timiraos, a prominent Fed spokesperson, wrote that Federal Reserve officials recently lost access to third-party employment data. Since 2018, payroll processor ADP has provided the Fed with a dataset containing anonymized employment and earnings information, covering 20% ​​of the US private sector workforce. The Fed typically receives this data with a delay of approximately one week, making it a timely and comprehensive measure of labor market conditions. According to sources familiar with the matter, ADP stopped providing the Fed with this data after Fed Governor Waller delivered a speech in late August that drew public attention to the Fed's long-standing use of ADP employment data. The specific reasons for this change are unclear. Waller cited the ADP data in a footnote accompanying his speech, further emphasizing his concerns about a slowing labor market. The footnote noted that preliminary estimates showed hiring continued to deteriorate over the summer, and that the data covered a period beyond the coverage of the latest government data.