Preview: Due July 1 - U.S. June ADP Employment - Weekly ADP data remains healthy
We expect a 125k increase in June’s ADP estimate for private sector employment, which matches our forecast for private sector non-farm payrolls in June. It is also consistent with a 30.75k four week average for the ADP weekly report in the weeks to June 6, the week before monthly data was surveyed.
With ADP’s report having increased by 122k in May while private payrolls increased by 120k this would be a second straight month of consistency, though a longer term history shows that consistency is far from guaranteed. We expect overall non-farm payrolls including government to increase by 115k in June, as government corrects an increase that lifted overall payrolls to 172k in May.
While we expect both ADP and private sector data to produce similar outcomes in June to May, weekly initial and continued claims data hints at some downside risk.
While May’s ADP and private payroll outcomes were similar, the details we are not, with ADP seeing a rise of only 8k in leisure and hospitality while private payrolls saw that sector up by a strong 70k, which could be related to the approach of the World Cup. We expect ADP data in June to show an improvement in leisure and hospitality but a loss of momentum in other services, though it may be the case that if the World Cup is creating a substantial number of short term jobs, payrolls are picking them up better. Consistency between the two reports is far from guaranteed.
