Is the New ADP Payroll Report a Better Mousetrap?

In a country that's home to more than 4,000 patented mousetrap designs, it only makes sense that we'd try to build a better jobs barometer too. And why not given the government report put out each month by the Bureau of Labor Statistics has been shrouded in controversy while it is widely known that the official unemployment rate flagrantly understates the current level of joblessness. That's exactly what ADP, with the help of Moody's (MCO) now, is trying to do, and the latest report might just reflect that.

While today's headline number of 118,000 private jobs being created in November is being reported to be less than the 125,000 economists expected, that summation misses the big picture and some important underlying trends.

Related: Weak ADP Data Raises Stakes (and Fears) for Friday's Govt. Jobs Report

"Compared to the consensus for non-farm private payrolls (currently estimated to be 50,000) it still shows a decent clip of private hiring," says Andrew Wilkinson, chief economic strategist at Miller, Tabak & Co. in the attached video. While many economists appear to have been spooked by the disruption of Hurricane Sandy and uncertainty from the fiscal cliff, Wilkinson thinks the rejuvenated tool from ADP is valuable.

Related: Who's Hiring? High Paying Jobs That Nobody Wants

Here's what he recently wrote in a note to clients:

"What we find especially encouraging in the latest ADP report is the advance of hiring amongst companies employing more than 1000 employees. Those companies added 62,000 positions in November bringing the level to 2.9% below its value when payrolls peaked at the start of 2008."

It's a trend that he says "tends to fly in the face of claims that the fiscal cliff is limiting job creation at big companies."

As for the report itself and its objective to be a more predictive and accurate gauge of the job market, Moody's research back-tested its new process to 2001 and came up with a 96% correlation with the government's job report that comes out this Friday. But there's a catch. The government's numbers are a flash estimate, while the ADP report is designed to target where the volatile government data will ultimately end up after all the revisions and adjustments.

Related: Who's Hiring? An Inside Out View of High Unemployment