ADP employment report preview

ADP employment data to be released at 13:15 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 216,000 in November. In October payroll grew by 119,000.
• Small business sector hiring at 37,000.
• Employment in franchise increased by 15,100.
• 10,000 jobs lost in the manufacturing sector.
• 11,000 jobs were lost in the goods-producing sector.
• Construction sector added 2,000 jobs.
• 12,000 jobs were added in financial activities.
• Services sector remains the major job provider. Payroll added 228,000 people in October.

Expectation Today –

• The headline number is expected to rise to 173,000 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 already rising 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.

However, there may not be much volatility surrounding the report, as the focus would be on the NFP report on Friday. The dollar index is currently trading at 102.91, down a quarter percent for the day so far.