US economic surprise index lowest since 2008 crisis as ADP falters

US economic surprise index reached worst level since 2008 crisis as economists seem to overestimate the strength of US economy. Chart courtesy Bloomberg.

• US economic surprise index touched -0.851 as ADP unemployment surprised to the downside.
  
  
• There is no doubt that US economy is growing and will probably increase pace as growth returns globally, however pace might have been overestimated as of now which makes dollar very vulnerable as traders have betted heavily on dollar strengthening over growth and monetary policy divergence.
  
  
• Latest report from ADP shows that 169,000 people were added to payroll in April. March's payroll was revised at 175,000 from 189,000.
  
• Small business added 94,000 people to payroll while franchise added 16,000.
  
• Manufacturing sector lost about 10000 jobs and goods producing sector lost about 1000 jobs.
  
  
• Service providing sector remains solid, adding about 170,000 jobs in April.
  
  
• Large companies add about 5000 jobs whereas small sector with less than 50 employees added about 94,000 jobs, rest provided by medium sector.

Dollar would remain in back foot heading into UK election and non-farm payroll report later this week.

Dollar index is trading at 94.5, down -0.61% today. 94 area remains key support that would remain challenge for the bears.