ADP employment report preview

ADP employment data to be released at 12:15 GMT is today’s most vital dockets from the 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.

Past performance –

• Non-farm private sector employment grew at 177,000 in April. In March payroll grew by 263,000.
• Small business sector hiring at 61,000 in April.
• Midsized companies added 78,000 jobs.
• Large companies added 38,000 jobs last month.
• Employment in franchise increased by 5,400.
• 11,000 jobs added in the manufacturing sector.
• 3,000 jobs were added in the natural resources and mining sector.
• 12,000 jobs were added in the goods-producing sector.
• Construction sector lost 2,000 jobs.
• Leisure and hospitality sector added 35,000 jobs.
• 2,000 jobs were added in financial activities.
• Services sector remains the major job provider. Payroll added 165,000 people in April.

Expectation Today –

• The headline number is expected to rise to 185,000 as per median estimate.

Market Impact –

• Any gain above 230,000 will be considered to be very good and the US stock market would rise further on risk-affinity, along with a recovery in the dollar. The dollar index is currently trading at 97.1, up 0.2 percent for the day so far.

• Data below 150,000 likely to give rise to concerns regarding US economic prowess and doubts would emerge on manufacturing revival under Trump.