Encouraging US ADP Non-Farm Employment Report
The ADP employment report came in much stronger than expected and revisions for November were great as well
The US economy has weakened considerably during the last year, especially manufacturing which has fallen into contraction and which will likely turn into recession. The trade war has had a big negative impact on the US economy, apart form the rest of the globe, and increasing tensions with Iran have hurt the sentiment.
But, employment looks pretty good in the US. The unemployment rate stands at around 3.5%, while earnings, although not great, are satisfying for the time being. Employment had a dip several months ago, which increased fears that the economic slowdown might have spilled into employment as well.
But, today’s ADP non-farm employment change is bringing back hopes. The numbers for November were revised much higher, from 67k to 124k, while December’s figures were much better. Expectations were for a 160k increase in new jobs, but the actual number came at 220k.
This is a sign that the main employment report at the end of the week will likely be positive. If jobs grow at this pace, average hourly/weekly earnings will pick up as well. Although, there was no reaction in the USD, since markets are now focused on the US-Iran conflict.
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