Preview: Due September 30 - U.S. September ADP Employment - Signs of improvement
We expect an 85k increase in September’s ADP estimate for private sector employment. The 4 week average from ADP’s weekly report for the week to September 5, the week before the monthly survey, was 20k and picking up. This implies a monthly increase slightly stronger than 80k.
This is still below our forecast for private sector non-farm payrolls of 100k, which is also our forecast for overall payrolls including government. This would be a third straight ADP underperformance relative to payrolls though significantly less so than in August and would leave ADP and payroll data almost exactly consistent over five months.
A rise of 85k in the ADP report would still be a significant improvement from August’s 38k and July’s 46k, but weaker than every month in Q2. Initial claims are consistent with some improvement in the labor market in September.
September’s ADP employment gains are likely to be moderate and broad based. The greatest scope for rebounds comes from manufacturing, which fell by 17k in August, and business and professional, which fell by 16k. September’s gain is likely to be less dependent on education and health, where August saw a rise of 45k, more than fully explaining that month’s overall ADP increase.
