Preview: Due July 30 - U.S. July ADP Employment - A correction from June's decline
We expect a rise of 70k in July’s ADP estimate for private sector employment growth. This would be a significant correction from a 33k decline in June which was the first decline since March 2023, though still leaving a significant slowing in trend. June’s decline followed subdued gains of 29k in May and 60k in April.
With our forecast for June private sector non-farm payrolls being 110k we expect the ADP report to show a fourth straight underperformance of the non-farm payroll, though less sharply than in the last there months. We expect overall payrolls including government to rise by 125k.
June’s ADP data was restrained by steep declines of 56k in professional and business and 52k in education and health, both of which are likely to be corrected. Education and health has been the main source of contrast between payrolls, where it has continued to lead growth, albeit with some slowing in June, and the ADP report. The contrast is likely to persist in July, if less sharply.
The bounce in July’s ADP report is likely to be led by services, with goods likely to slow from stronger June data, particularly a 15k increase in manufacturing. We also expect July’s non-farm payroll to see some pick up in services from a slower June but slowing in goods after a stronger June.
