ADP employment report preview

ADP employment data to be released at 12:15 GMT is today’s most vital dockets from US to be watched by market participants. This report is one of the key data that investors will use to gauge US economic strength.

What is ADP employment?

• The report is a measure of non-farm private sector employment which is obtained by utilizing an anonymous subset of roughly 400,000 U.S. businesses which are clients of ADP.
   
• This data is a very good measure of employment strength of the economy and a good precursor of Nonfarm payroll data.

Previous performance –

• Non-farm private sector employment grew at 172,000 in June. In May payroll grew by 168,000.
• Small business sector hiring at 95,000.
• Employment in franchise increased by 40,700.
• 3,000 jobs were lost in manufacturing sector.
• 21,000 jobs were lost in goods producing sector.
• Construction sector lost 5,000 jobs.
• 2,000 jobs were added in financial activities.
• Services sector remains job provider. Payroll added 208,000 people in June.

Expectation Today –

• Headline number is expected to marginally decline to 170,000 as per median estimate.

Market Impact –

• Any gain above 200,000 will be considered to be very good and rate hike bets are likely to rise once more, providing support to the dollar.
   
• Data below 150,000 likely to give rise to concerns regarding US economic prowess and investors would have to consider their rate hike outlook, and there could be fresh run towards safety.

Dollar index is currently trading at 95.24, up 0.1 percent for the day.