For a third month in a row, ADP released a better than expected report for the private sector: a gain of 162K was reported, beating expectations of 145K. Last month’s figure was revised to the downside: 189K instead of 201K originally reported, but still better than the initial expectations.
ADP raised the expectations for the Non-Farm Payrolls, but the latter badly disappointed, including the private sector. So, should the ADP figure be disregarded when forecasting the NFP? Or does ADP foresee a turnaround in the American job market?
Looking at the broader picture in the past, ADP did match the NFP when looking at the larger trends and turnarounds. Later revisions to old data saw a bigger correlation than the initial publications of both data.
The better than expected numbers for three months might lead us to assume an upwards revision of the last NFP, and perhaps a better one this time.
On the other hand, we have a negative insight about the job market from another institution: the ISM Non-Manufacturing PMI (services) came out better than expected. But, the employment component actually fell to lower ground: only 51.5 points – showing slow growth.
So, will the Non-Farm Payrolls shine on Friday? Or will it remain around the mediocre 100K?
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