U.S. July ADP Employment - Rebound from June decline
ADP’s July estimate of private sector employment shows a stronger than expected rebound of 104k from a negative June, revised to -23k from, -33k. The ADP gain is in line with our forecast for private sector payrolls at 110k. We expect overall non-farm payrolls to rise by 125k.
ADP data has significantly underperformed the non-farm payroll in the last three months, so the ADP data could be seen as implying upside payroll risk, particularly given recent declines in initial claims.
The ADP underperformance of payrolls has been led by education and health, which remains weak in this ADP report, with a fall of 38k. Strength was led by leisure and hospitality, up by 46k. Also strong was financial at 28k, trade transport and utilities at 18k and construction at 15k. Manufacturing was also positive at 7k.
Yr/yr growth in wages was slightly weaker in the ADP report showed job stayers at 4.4%, unchanged from June, and job changers at 7.0%, up from 6.8% in June and breaking a slowing trend.
