"Payroll-processing giant ADP quietly stopped sharing its internal data with the central bank in late August, leaving Fed economists without a real-time measure that had covered about one-fifth of the nation's private workforce. For years, the feed had served as a real-time check on job-market conditions between the Bureau of Labor Statistics' monthly reports. Its sudden disappearance, first reported by The Wall Street Journal, could leave the Fed "flying blind," former Bureau of Labor Statistics commissioner Erica Groshen said."
"Groshen told Fortune that, in her decades working at the BLS and inside the Fed, the loss of ADP data is "very concerning for monetary policy."The economist warned that at a moment when policymakers are already navigating a fragile economy-Fed Chair Jerome Powell has said multiple times that there is no current "risk free path" to avoid recession or stagflation-the data blackout raises the risk of serious missteps."
"Rupture after years of collaboration Since at least 2018, ADP has provided anonymized payroll and earnings data to the Fed for free, allowing staff economists to construct a weekly measure of employment trends. The partnership is well-known to both Fed insiders and casual market watchers. However, according to The American Prospect, ADP suspended access shortly after Fed Governor Christopher Waller cited the data in"
The Federal Reserve must set interest rates with limited economic information because a government shutdown halted most U.S. statistics and ADP stopped providing a private payroll feed. ADP's internal data had covered about one-fifth of the private workforce and served as a real-time employment check between Bureau of Labor Statistics reports. ADP had provided anonymized payroll and earnings data to the Fed for free since at least 2018, enabling weekly employment measures. The sudden loss of that feed reduces real-time visibility into the labor market and increases the risk of misjudged monetary policy.
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