US ADP September Preview: Markets to overlook figures until correlation with NFP return
|Private payrolls are expected to rise 648,000 in September. The correlation of the ADP employment change figures with Nonfarm Payrolls has fallen sharply in the five months since the recovery began in May, therefore, the market impact has declined, as FXStreet’s analyst Joseph Trevisani notes.
Key quotes
“Private payrolls from Automatic Data Processing are forecast to rise by 648,000 in September after adding 428,000 in August.”
“Forecasts for both ADP and NFP missed the labor market turn in May. Following the huge job losses in April predictions were for those to continue, ADP was expected to shed 9 million more workers and NFP 8 million. In fact, NFP gained 2.699 million employees that month while the initial ADP number showed a loss of 2.76 million positions. Similar discrepancies occurred in June, ADP initial result 2.369 million, NFP 4.971 million, ADP revision 4.485 million, and July ADP first release 167,000, NFP 1.734 million, ADP second release 212,000. In August ADP was 428,000 and NFP was 1.371 million.”
“The September estimates of 648,000 for ADP and 850,000 for NFP may represent a return of the historical relationship between these two US employment numbers. But even if these number end in agreement for September it will require more than one month or several until the markets trust ADP on Wednesday to front for NFP on Friday.”
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