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US: ADP Employment Report
| Consensus | Consensus Range | Actual | Previous | Revised | |
| Private Payrolls - M/M | 75,000 | 62,000 to 100,000 | 44,000 | 98,000 | 95,000 |
Highlights
Private payrolls rise a modest 44,000 in July from June, below the 75,000 anticipated in the Econoday consensus, with the June figure revised down to 95,000 from 98,000 previously reported.
Goods-producing jobs are down 3,000 while services are up 47,000. Within goods jobs, natural resources/mining is down 6,000, construction is up 1,000, and manufacturing is up 2,000.
Within services, the best gain are education/health services, up 36,000 and finance, up 10,000, while the biggest losers are leisure/hospitality down 11,000 and trade/transportation/utilities, down 8,000.
Market Consensus Before Announcement
Private payrolls are expected up a moderate 75K in July, down from 98K in June.
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.
