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US: ADP Employment Report
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Private Payrolls - M/M | 40,000 | 30,000 to 50,000 | 62,000 | 63,000 | 66,000 |
Highlights
ADP payrolls top expectations with a gain of 62,000 versus 40,000 expected in March from February. February's rise from January also revised up to 66,000 from 63,000 previously reported. These are moderate gains and reassuring in the context of worries that the job market is tanking.
Jobs in the goods sector, up 30,000 on the month, got a lift from mining/natural resources, up 11,000, with construction up 30,000, offset by manufacturing down 11,000. On the services side, up 32,000, a big drop in trade/transportation/utilities, down 58,000, is offset by an increase of 58,000 in education and health services with information up 16,000 and leisure and hospitality up 7,000.
Market Consensus Before Announcement
The weekly ADP report has been showing jobs up 10K a week on average in March, so that means about 40K a month.
Definition
The national employment report from Automated Data Processing Inc. is computed from ADP payroll data and offers advance indications on the U.S. workforce. ADP's data cover more than 500,000 companies totaling more than 25 million employees. The report is produced by ADP Research Institute in collaboration with Stanford Digital Economy Lab.
Description
Market players have become accustomed to the excitement on employment Friday and realize the rich detail of the monthly employment situation can help set the tone for the entire month. While economists have improved their nonfarm payroll forecasts over the years, it is not unusual to see surprises on employment Friday. To that end, the ADP's national employment report can help improve the payroll forecast by providing information in advance of the employment report.
The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.
By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.
