ADP Fills Data Void, Helping Fed Chart Rate Cut Path

The Federal Reserve is poised to cut interest rates by a quarter-point at its October 29-30 meeting, with traders pricing in a 97.6% probability of the move, bringing the target range to 3.75%-4%, according to Yahoo Finance. This decision follows a government shutdown that has delayed the release of critical labor market data, including the September jobs report, leaving the Fed reliant on alternative metrics like private-sector employment numbers, the Yahoo piece noted. Bank of America analysts noted that while a December cut is not currently forecasted, the central bank may reconsider if further data gaps persist.

The shutdown has also amplified scrutiny on Automatic Data Processing (ADP), which recently announced it will publish weekly employment data publicly after terminating a data-sharing agreement with the Fed, according to GuruFocus. U.S. Senator Elizabeth Warren (D-Mass.) urged ADP to step in after the Trump administration refused to release Bureau of Labor Statistics (BLS) job data, calling the move essential for the Fed to avoid "flying blind" amid economic uncertainty, the coverage added. ADP's decision to share its proprietary data comes as the company reports strong financial performance: its Q3 2025 revenue rose 7.1% year-over-year to $5.18 billion, with non-GAAP earnings per share of $2.49, beating analyst estimates. The company also announced the acquisition of Pequity, a compensation management software provider, to expand its offerings for complex payroll needs.

The Fed's reliance on ADP highlights broader challenges in navigating the labor market. Bankrate analyst Stephen Kates observed that the October CPI report—a lighter-than-expected release—provided "a confidence boost" to the Fed, which remains cautious about the job market's trajectory, the Yahoo piece observed. BofA analysts noted that while the labor market is "at best holding steady and at worst slightly deteriorating," the absence of official jobs data has forced the Fed to lean on alternative indicators like state unemployment claims and ADP's data. This dynamic could influence the Fed's December meeting, where traders are now pricing in a greater than 95% chance of another 25-basis-point cut, according to Barron's.

ADP's recent financial resilience—marked by a 26.32% operating margin and $113.28 billion market cap—positions it as a critical player in filling the data void. However, the Fed's ability to act decisively remains constrained by the lack of comprehensive labor data, with Chair Jerome Powell emphasizing the need for a "meeting-by-meeting" approach, the GuruFocus coverage noted. As the December meeting approaches, the interplay between ADP's data and the Fed's policy calculus will likely shape market expectations for a more aggressive easing cycle in early 2026.