Analysts at Nomura explained that the ADP reported a 178k increase in private employment during May, slightly below expectations (Nomura: 205k, Consensus: 190k).
Key Quotes:
“The April estimate was revised down to 163k, from the previously reported 204k, consistent with the softerthan-expected BLS report for April. Goods-producing industries continued to contribute solidly to employment growth in May with mining (+11k), construction (+39k) and manufacturing (14k) all in positive territory.”
“Service-providing employment was strong except for a 23k decline in trade/transportation/utilities employment, possibly related to ongoing structural changes in the retail sector (ADP does not separate out retail). Professional & business services (+61k), education/health services (+35k) and leisure/hospitality (+33k) all showed solid growth.”
“Overall, ADP’s estimate of May employment change was below our forecast of 205k for the BLS’ estimate of private payroll gain for May. However, our above-consensus forecast reflects potential upside risk from weather effects. Historically, ADP has had a difficult time capturing weather effects for employment growth.”
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