U.S. September ADP Employment - Consistent with lower initial claims
September’s ADP estimate of private sector employment of 90k is on the firm side of expectations and a 3-month high for the ADP report. It leaves us comfortable with our 100k forecasts for both private sector and overall non-farm payrolls.
Education and health, which has led most recent non-farm payrolls but has seen some recent loss of momentum, led the latest ADP gain with a rise of 55k.
Also firm were leisure and hospitality at 22k, manufacturing at 17k and construction at 15k. Declines were seen in financial by 16k and business and professional by 11k.
The more positive tone corresponds with falling numbers for both initial and continued claims. While the data argues for a healthy non-farm payroll gain the ADP data is not always a reliable signal. In August ADP’s estimate increased by only 36k while private sector non-farm payrolls rose by 127k.
Still, labor market signals are mostly solid, and hints of improved momentum are consistent with expectations that Q3 GDP will show some acceleration.
