"Fed megaphone": Fed loses access to "small non-farm" employment data

On October 23rd, "Federal Reserve Messenger" Nick Timiraos wrote that Federal Reserve officials have recently lost access to employment data provided by third parties. Since 2018, payroll processing company ADP has been providing the Federal Reserve with a dataset containing anonymous employment and income information, covering 20% of the US private sector workforce, and the Fed can usually obtain this data after a delay of about a week, making it a timely and comprehensive measure of the state of the job market. ADP stopped providing ADP employment data to the Federal Reserve after Fed Governor Paul Waller gave a speech in late August and drew public attention to the Fed's long-term use of ADP employment data, according to people familiar with the matter. It is not clear what caused the change. In his remarks, Mr. Waller added to his concerns about the slowdown in the labour market by citing the ADP data in an accompanying footnote, which noted that initial estimates showed hiring continued to deteriorate over the summer and that the data was longer than the latest government data covered.