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 183,000 in February. In January payroll grew by 300,000.
• Small business sector hiring at 12,000 in February.
• Midsized companies added 95,000 jobs.
• Large companies added 77,000 jobs last month.
• 17,000 jobs created in the manufacturing sector.
• 3,000 jobs were created in the natural resources and mining sector.
• 44,000 jobs were added in the goods-producing sector.
• Construction sector added 25,000 jobs.
• Leisure and hospitality sector added 4,000 jobs.
• 21,000 jobs were added in financial activities.
• Services sector remains the major job provider. Payroll added 139,000 people in February.

Expectation Today –

• The headline number is expected at 170,000 as per the median estimate.

Market Impact –

• Any gain above 210,000 will be considered to be very good and the US stock market would rise further on risk-affinity, along with a rise in the dollar. The dollar index is currently trading at 97.05, down 0.26 percent for the day so far.
   
• The broader trend for the USD is down for the day. So, a materially weak report with gains below 160,000 would accelerate the selloff in USD.