Preview: Due January 8 - U.S. December ADP Employment - Seen matching payrolls, but recent bias to outperform
We expect a 140k increase in December’s ADP estimate for private sector employment growth, which matches our estimate for private sector non-farm payroll growth, though we expect overall non-farm payrolls including government to increase by 175k.
ADP data has recently had a tendency to outperform payrolls, with underperformances of 48k in November and 63k in September failing to fully offset a 186k ADP outperformance in October, when payrolls showed more sensitivity to hurricanes than did the ADP report.
There are few obvious special factors this month suggesting data will be in line with trend. A 140k ADP increase would be a 4-month low but close to the 6-month average of 143k.
In the ADP detail we expect some improvement in goods after November data saw a very weak 26k decline in manufacturing but some loss of momentum in services. However, services are likely to record solid growth, we expect of 125k, while manufacturing declines by 10k.
