Preview: Due January 31 - U.S. January ADP Employment - Regaining momentum
We expect a 175k increase in January’s ADP estimate for private sector employment growth, which would be a 5-month high for the ADP report, and stronger than our 150k forecast for private non-farm payrolls (though we expect overall non-farm payrolls to rise by 200k).
ADP and private payrolls were spot on in consistency in December, both increasing by 164k, but such consistency is unusual. Lower initial claims and other recent positive economic signals suggest that ADP will sustain a regaining of momentum seen in December after there straight unimpressive months when gains were close to 100k.
ADP may outperform non-farm payrolls this month as it tends to be less sensitive to weather from which we some downside risks to payrolls. January 2023 in contrast, when weather was unusually mild, saw payrolls sharply outperform the ADP report.
