On days without "non-farm" data, "small non-farm" has become the "only" focus of the market

In the absence of official employment data from the United States, the typically "appetizer" report known as the "ADP" unexpectedly became the market's focus.

Due to the U.S. government shutdown, the Bureau of Labor Statistics (BLS), responsible for releasing the non-farm employment report, has suspended operations, preventing the official data that was supposed to be released on Friday from arriving on time. As a result, the market's attention this Wednesday was entirely focused on the private sector employment data released by ADP, commonly referred to as the "little non-farm."

The ADP report shows that in September, private sector employment unexpectedly decreased by 32,000, far below market expectations. Following the data release, U.S. stock index futures fell slightly, and the yield on the 10-year U.S. Treasury bond briefly dropped by 7 basis points. However, as skepticism about the data began to spread, the stock market turned upward, and bond yields recovered some of their earlier losses.

This highly anticipated report ultimately raised more questions than answers for the market, making it even more challenging for investors to assess the state of the U.S. economy.

A Confusing Report

The confusion caused by the ADP report partly stems from its historical performance. Past records show that ADP data is not always accurate in predicting official non-farm employment figures. This month's report is even "more unusual" than usual.

It is understood that ADP recalibrates its "National Employment Report" annually based on the Bureau of Labor Statistics' "Quarterly Census of Employment and Wages" (QCEW) data, and this technical adjustment alone led to a reduction of 43,000 jobs under the same conditions.

This means that the market should remain cautious when interpreting weak numbers, and it also reveals a deeper fact: private statistical data itself relies on official data as a key basis.

Private Data Cannot "Fly Solo"

Analysis indicates that data collection is a difficult, labor-intensive, and costly task, and private data is not yet ready to independently bear the responsibility of guiding the market. As the ADP example shows, many private data providers and users need to utilize government data to fine-tune their models.

In recent years, high-frequency "alternative data" from private suppliers has become a valuable resource, but it is typically only accessible to institutional investors like hedge funds and a few market columnists, failing to benefit everyone equally. While the quality of data continues to improve, it still contains "noise" and is highly imperfect.

More importantly, in areas such as public policy and academic research, the private sector lacks sufficient profit motivation to collect data, nor will it take on that role. For example, employment data regarding specific groups such as women or rural residents in the United States, which is precisely where official statistics hold value

Official Statistics Also Face Challenges

Of course, the Bureau of Labor Statistics is not without its flaws.

The agency has long faced issues of underfunding, with its budget adjusted for inflation continuously declining over the past decade and potentially facing further cuts in the 2026 budget. Budget and staffing constraints have forced it to take on more work with fewer resources, raising concerns among some users about data quality.

Last year, the agency was also criticized for unevenly disclosing real estate market data to a small group of "super users."

Meanwhile, official statistics work is also under political pressure. Previously, the Trump administration used a significant preliminary benchmark revision of wage data to justify major changes to the Bureau of Labor Statistics and the dismissal of then-director Erika McEntarfer.

After a poor employment report was released, Erika McEntarfer was fired via social media. Subsequently, the Trump administration nominated EJ Antoni from the Heritage Foundation as her successor, actions that undermined public confidence in the agency