As the U.S. government shutdown continues, economic data remains sparse, making this week’s ADP Non-Farm Employment Change report the focal point for “Jobs Week.” The report, set for release on Wednesday morning, will offer one of the few timely insights into labor market conditions.

Unfortunately for labor market bulls, recent ADP readings have been trending in the wrong direction. Last month’s report reflected 32,000 jobs lost in September, a disappointing figure compounded by a preliminary re-benchmarking of the National Employment Report, which subtracted an additional 43,000 jobs from the tally. This adjustment will remain in effect going forward, suggesting that future job growth may appear more subdued under the revised methodology.

ADP also highlighted that some of the underlying data from the Quarterly Census of Employment and Wages (QCEW) contained an unusually high number of missing or redacted values across establishment sizes, NAICS sectors, and geographic subgroups. As a result, ADP was forced to impute (estimate) portions of the data, introducing a degree of uncertainty into the results. Despite these challenges, the ADP report remains one of the best labor indicators currently available and will likely serve as the market’s benchmark until broader government data resumes.

Complementing this week’s labor focus, several Purchasing Managers’ Index (PMI) releases will provide sentiment-based insights into employment and inflation trends across the manufacturing and services sectors. The ISM Manufacturing PMI is scheduled for release this morning at 10:00 a.m. ET, followed by the ISM Services PMI on Wednesday, November 5th. While PMIs do not contain “hard data,” they often serve as early signals of directional shifts in the economy.

For market participants, focusing on the trend in ADP data rather than the headline number may offer a clearer view of labor market momentum. Given the ongoing government shutdown, the eventual release of official labor statistics could be highly volatile, reflecting pent-up adjustments once operations resume.

This week’s labor market narrative will hinge on the ADP report, serving as a crucial placeholder amid the data blackout caused by the shutdown. Investors and policymakers alike will be watching closely, not for perfection in the data, but for the direction of the trend, which may reveal whether the U.S. job market is stabilizing or beginning to falter under the weight of prolonged policy uncertainty.

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