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 237,000 in August. In July payroll grew by 178,000.
• Small business sector hiring at 48,000 in August.
• Midsized companies added 74,000 jobs.
• Large companies added 115,000 jobs in August.
• Employment in franchise increased by 21,200.
• 16,000 jobs added in the manufacturing sector.
• 1,000 jobs were lost in the natural resources and mining sector.
• 33,000 jobs were added in the goods-producing sector.
• Construction sector added 18,000 jobs.
• Leisure and hospitality sector added 51,000 jobs.
• 11,000 jobs were added in financial activities.
• Services sector remains the major job provider. Payroll added 204,000 people in August.

Expectation Today –

• The headline number is expected to increase to 125,000 as per median estimate.

Market Impact –

• Any gain above 200,000 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 92.36, down 0.3 percent for the day so far.

• Data below 120,000 likely to give rise to concerns regarding US economic prowess and doubts would emerge on manufacturing revival under Trump.