ADP employment report preview

ADP employment data to be released at 12:15 GMT, is today’s one of the 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 129,000 in March. In February payroll grew by 197,000.
• Small business sector hiring at 6,000 in March.
• Midsized companies added 63,000 jobs.
• Large companies added 60,000 jobs last month.
• 2,000 jobs lost in the manufacturing sector.
• 2,000 jobs were created in the natural resources and mining sector.
• 6,000 jobs were lost in the goods-producing sector.
• Construction sector lost 6,000 jobs.
• Leisure and hospitality sector added 13,000 jobs.
• 1,000 jobs lost in financial activities.
• 56,000 jobs added in Education and Health.
• The services sector remains the major job provider. Payroll added 135,000 people in March.

Expectation Today –

• The headline number is expected at 180,000 as per the 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 97.45, down 0.07 percent for the day so far.

• The broader trend for the USD is down for the day and week. So, a materially weak report with gains below 150,000 would accelerate the selloff in USD.