Romney Mum on Weak ADP Report
NEW YORK (TheStreet) -- Why didn't Mitt Romney crow about Wednesday's disappointing report on private sector job growth?
The data on April from payroll processor Automatic Data Processing came in well below the market's expectations, handing the former Massachusetts governor an easy opportunity to get in a dig against President Barack Obama.
"Right now it has depressed the mood of the market, slightly, because I think investors were certainly buoyed by yesterday's ISM manufacturing survey, but when you get a piece of soft data ... that then gets refuted by some hard data -- which is employment -- then you start questioning which one is right," said Sam Stovall, chief equity strategist at S&P Capital IQ.
ADP reported that the private sector added 119,000 jobs last month. That was below expectations of 175,000. ADP records data from some 400,000 U.S. businesses that represent about 24 million U.S. employees in all private sectors, according to Bloomberg and the monthly report is viewed as a precursor to Friday's all-important monthly nonfarm payroll report.
The report breaks down the number of jobs added by small, medium and large businesses, and it said small businesses added the most jobs for April at 58,000. The Romney campaign, coincidentally, sent out a press email that blasted Obama, saying the presiden has avoided talking about plans to increase taxes on these small business owners.
Though Romney could have used the ADP miss against Obama, there wasn't any mention in the press email of the report.
The ADP number is known for being fairly volatile and it often fluctuates from the nonfarm payroll number. Economist typically see it as one more datapoint, rather than an indicator with a strong correlation to the government's data. Stocks were down modestly in Wednesday's trading.
"You start to say, 'Well, gee, one is forecasting this, but the other is forecasting that.' The answer is, 'Well, in the long run, no, they do tend to converge,'" said Stovall.