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 upcoming Nonfarm payroll data.

Past performance –

• Non-farm private sector employment grew at 163,000 in August. In July payroll grew by 217,000.
• Small business sector hiring at 21,000 in August.
• Midsized companies added 111,000 jobs.
• Large companies added 31,000 jobs last month.
• 19,000 jobs created in the manufacturing sector.
• 1,000 jobs were lost in the natural resources and mining sector.
• 24,000 jobs were added in the goods-producing sector.
• Construction sector added 5,000 jobs.
• Leisure and hospitality sector added 25,000 jobs.
• 7,000 jobs were added in financial activities.
• Services sector remains the major job provider. Payroll added 139,000 people in August.

Expectation Today –

• HThe headline number is expected at 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 further rise in the dollar. The dollar index is currently trading at 95.18, up 0.05 percent for the day so far.

• Data below 160,000 likely to give rise to concerns regarding US economic prowess and the dollar is likely to get hit badly. However, the broader fundamental trend for the dollar shifted to the upside over Brexit tensions.