ADP Report Creates Worry of Revisions

While Shepherdson argues that the ADP's revision to its own April number "does not necessarily imply the official payroll number will also be revised down," other market analysts disagree.

"When we're in a contracting economy -- and we are still contracting -- the revisions tend to be to the downside," said Paul Nolte, director of investments with Hinsdale Associates. "I would expect to still see a downward revision to the previous month. Until we actually see the economy expand, we will continue to see downward revisions to past numbers."

History is taking Nolte's side. The Labor Department's data has been revised lower for the last 15 consecutive months at an average number of about 93,600. And if that weren't enough, the few recent downward revisions to the ADP employment numbers appear to have presaged ones to the Labor Department's reports.

After ADP revised the February loss to 706,000 from 697,000, the Labor Department revised its own report from a decline of 651,000 jobs to 681,000. Similarly, ADP's November loss of 250,000 jobs was revised a month later to a drop of 472,000. The Labor Department's nonfarm payrolls loss of 533,000 jobs in November was later revised to a drop of 597,000.

Nolte also points out that that the less-than-expected decline in the government's April report is explained by a 72,000 jump in government jobs, which does little to help the private sector. He expects other service-providing numbers, including financials and retail trade, to show downward revisions.