Preview: Due October 1 - U.S. September ADP Employment - May get more attention if Federal government shuts down
We expect a rise of 45k in August’s ADP estimate for private sector employment growth. This would match our forecast for overall non-farm payrolls but underperform our 50k forecast for private payrolls, correcting from three straight modest outperformances.
Both ADP and non-farm payrolls are now showing only a marginally increasing trend, though the picture is one of limited hiring and limited layoffs, rather than an economy entering recession. Initial claims have recently moved marginally higher but continued claims have fallen.
ADP trend has been reasonably consistent with payrolls in recent months, once payrolls for May and June were revised down with July’s data, though ADP data has been outperforming on goods and underperforming on services. That is likely to continue. Payrolls have been showing most of the modest gains coming largely in health care, a sector which has consistently underperformed in the ADP report.
While ADP has been reasonably consistent with payrolls recently, it should not be seen as a reliable guide. ADP data could however get more attention than usual should the threatened government shutdown materialize, with the deadline for an agreement being October 1. September’s non-farm payroll is due on October 3 should a deal be reached.
