ADP non-farm payrolls were expected to rise by 165K in May after 119K initially reported for April. April’s number has been revised down to 113K. The miss in May is significant, though not horrible. It’s important to note that the average miss for ADP is 41K under the actual NFP.
EUR/USD is rising towards the 1.31 line it tried to conquer several times, and USD/JPY is down to 99.25 on the reduced expectations for QE tapering – a lower dollar. Update: after the initial reaction, EUR/USD is back under 1.31 and USD/JPY is closer to 99.50. The dollar is still lower, but not as much as earlier.
The number by Automated Data Processing hasn’t always been highly correlated with the private sector payrolls part of the official Non-Farm Payrolls.
However, after the formula change they made some time ago, the accuracy has improved. In addition, the figure is more important due to the greater importance that jobs have in the next decision of the Fed: the QE tapering.
There is another big figure awaiting us today, which also provides a hint for the NFP, perhaps the most important hint: the ISM Non-Manufacturing PMI.
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