Preview: Due September 4 - U.S. August ADP Employment - Slower than July which corrected a June decline
We expect a rise of 60k in August’s ADP estimate for private sector employment growth. This would be a slowing from 104k in July which outperformed the non-farm payroll, with July’s improved data looking in part corrective from a 23k decline in June.
ADP data has tended to underperform non-farm payrolls in recent months, though the sharp downward revisions to May and June non-farm payrolls released with July’s report made the two series look more consistent. We expect ADP data to marginally underperform a 70k rise in August’s private sector non-farm payroll. We expect overall non-farm payrolls to increase by 65k.
Initial claims data suggest both the ADP and non-farm payroll data will look more like the moderate gains seen in July than the near flat outcomes for May and June, though with labor supply constrained by immigration policy, August employment growth is likely to remain subdued.
Non-farm payroll growth has been led by health care in recent months and ADP data from this sector has been significantly slower, leading ADP services data to underperform payrolls. ADP goods data has been on the firm side of what the non-farm payroll is showing. We expect this to persist in August.
