If yesterday's ADP Employment Report is any indication, tomorrow's jobs report may fall short of the 100,000 new job expectation from the Bureau of Labor Statistics. ADP reported 64,000 new jobs were created in April.
The ADP report has never been in lock-step with the "official" report from BLS, including this well-publicized event in June 2006 when ADP reported 368,000 new jobs created versus the BLS's figure of 121,000.
In that week, mortgage rates swooned on the ADP news and then tanked on the BLS report. To say traders were surprised at the discrepancy is an understatement. Mortgage rates jumped 0.25% and fell 0.25% within 48 hours.
In the past 11 months, though, the ADP report is growing increasingly more "accurate" with respect to the Non-Farm Payroll report from BLS and that is why yesterday's 64,000 is getting some respect in trading pits.
If ADP is on track and job growth is lower than expected, mortgage rate shoppers should benefit from lower mortgage rates overall because fewer workers means fewer dollars spent in the economy.
