The Federal Reserve has lost access to one of its most valuable sources of real-time labor market information—data provided by payroll giant ADP—just as the ongoing U.S. government shutdown has cut off most official economic reporting.
For years, ADP had supplied the Fed with a vast anonymized dataset covering around 20% of America’s private workforce, giving policymakers an unusually timely and detailed view of employment and wage trends. The information, usually delivered within a week of payroll processing, helped fill the gap between monthly reports from federal agencies and offered early signals of economic shifts.
Now, that steady flow of information has been disrupted. According to individuals familiar with the situation, ADP halted the Fed’s access shortly after an August speech by Federal Reserve Governor Christopher Waller cited the company’s data in a discussion about slowing job growth.
An Unexpected End to a Long-Running Data Partnership
Waller’s comments, which appeared in a footnote during a late-August speech, referenced ADP’s internal data as evidence that hiring activity was continuing to cool through the summer. Although the mention was brief, it drew attention to the Fed’s long-standing use of ADP’s payroll figures.
Soon after, ADP decided to pause the Fed’s access. While the exact reason for the move remains unclear, the company clarified that its collaboration with the Fed had always involved aggregated, anonymous administrative data—not client-specific or confidential information—and was offered as a public service at no cost.
ADP said it is currently working with the central bank to improve its data-sharing methods in line with internal compliance and quality standards. The company did not specify when access might resume.
How the ADP Data Helped the Fed See Labor Trends Early
The data-sharing relationship between ADP and the Federal Reserve dates back at least to 2018 and has been openly discussed in official Fed communications. Meeting minutes from the Federal Open Market Committee (FOMC) in recent years show that ADP’s data played a consistent role in the central bank’s labor market analysis.
Fed Chair Jerome Powell first made the collaboration public in a 2019 speech, explaining how Fed economists used ADP’s anonymized payroll information to estimate and forecast official government data published by the Bureau of Labor Statistics (BLS). This method allowed the Fed to detect early changes in hiring, wage growth, and employment trends that might later appear in revised government reports.
The data proved particularly valuable during periods of economic uncertainty, such as the early stages of the COVID-19 pandemic in 2020, when official statistics lagged behind real-time developments. Fed researchers used the ADP dataset to track sudden job losses and analyze the pace of recovery before traditional indicators caught up.
A Critical Data Gap at a Difficult Time
The timing of the data loss could not be worse for the Fed. Since October 1, the government shutdown has forced agencies like the BLS and the Census Bureau to furlough employees and suspend the release of most key economic statistics, including employment, inflation, and consumer spending reports.
Without those official numbers, the Fed has been left scrambling for private alternatives to monitor the health of the economy. Speaking at an economics conference last week, Powell acknowledged that while private-sector datasets can serve as useful stopgaps, they cannot fully replace official government statistics. He also pointed out that ADP’s employment data had been one of the more reliable private indicators.
Now, with that channel also cut off, policymakers are facing one of the most significant information gaps in recent memory.
Not the Same Data ADP Publishes Publicly
The private dataset the Fed had access to was different from ADP’s widely followed monthly National Employment Report, which the company releases to the public alongside the Stanford Digital Economy Lab. The Fed’s version provided much more granular, high-frequency data—often on a weekly basis—allowing central bank economists to identify shifts in hiring and wage trends faster than any other available source.
ADP’s September employment report, released soon after Waller’s speech, confirmed what the Fed governor had referenced: a clear cooling in job growth over the summer months. That alignment underscored how crucial the company’s private dataset has been for policymakers seeking to stay ahead of labor market changes.
Why It Matters for Fed Policy Decisions
The Federal Reserve relies heavily on employment data to guide decisions about interest rates and inflation management. With its dual mandate to ensure price stability and maximum employment, the loss of both government and private data complicates the central bank’s ability to gauge real-time economic conditions.
Analysts warn that the lack of reliable labor market data could affect the Fed’s judgment in future policy meetings, especially as officials weigh whether to maintain, cut, or raise interest rates amid signs of slowing growth.
While other private sources—such as job postings, credit card spending, and payroll processor data from smaller firms—can offer partial insights, few match the scale or accuracy of ADP’s anonymized records. The absence of that dataset leaves the Fed navigating with limited visibility at a time when market and political pressures are already high.
