Preview: Due August 5 - U.S. July ADP Employment - Weekly ADP data suggests some slowing
We expect a 65k increase in July’s ADP estimate for private sector employment, which is well below our forecast for July’s private sector non-farm payroll of 110k (we expect overall payrolls to rise by 120k). It is however similar to June’s non-farm payroll, which rose by 57k and 49k in the private sector.
In June the ADP employment report increased by 98k, outperforming private sector payrolls by 49k. In July we expect private sector payrolls to outperform the ADP report by 45k. Our ADP forecast is consistent with weekly ADP data in the weeks to July 11, the week before the payroll survey week, which shows a 4-week average weekly gain of 15k.
We expect the non-farm payroll to pick up from a slower June as leisure and hospitality rebounds from a 61k decline in June. June’s ADP report showed leisure and hospitality up by 2k, giving less scope for a bounce. Lower initial claims hint at a stronger non-farm payroll in July, but for the ADP report we will go with the signals from its weekly data.
We expect July’s ADP employment gain to come fully from private services. Education and health is likely to be the strongest component, but probably not as strong as its 48k increase seen in June’s ADP report.
