According to Automatic Data Processing (ADP), the US gained 192K private sector jobs in January. A gain of 164K was expected in January, after a gain of 215K in December (before revisions). The data for December was revised to the downside: 185K – this is now in line with the NFP figure for the private sector. The bigger picture remains the same: a continued path of slow growth for the US.
USD/JPY reacted with a small rise towards the 91.40 cap, but didn’t break higher. EUR/USD had a muted initial reaction. Update: EUR/USD is now sliding and fading away from the 1.3550 line it captured earlier in the day.
Update: the US economy contracts by 0.1% in Q4 2012 (first release) – much worse than expected.
The ADP figure usually has a significant impact, even though it isn’t always close to the private sector part of the official Non-Farm Payrolls report published on Friday. Last month, ADP was significantly higher than the gain in private sector jobs, at least in the initial releases.
A few months ago, ADP changed their formula. The early publication for January (still during the month) will likely be followed by a significant revision.
Today, the report will be shortly followed by another top-tier US publication: the first release (“Advance”) of GDP for Q4 2012. The market expects a slow growth rate of 1.1% (annualized).
Earlier, EUR/USD made a major move upwards, breaking above 1.35 and trading above the next minor resistance line of 1.3550. Also USD/JPY traded in high ground, stopping at 91.40.