U.S. January ADP Employment - Consumer facing industries lead healthy gain
ADP’s January estimate for private sector employment growth of 183k is on the firm side of expectations and in line with trend given positive recent back month revisions. We still see risk of a below trend non-farm payroll in January due to bad weather, which ADP data tends to be less sensitive to, though the ADP data suggests underlying strength persists.
Our forecast for the non-farm payroll is for a 125k increase overall, but only 95k in the private sector which is more directly comparable to the ADP report. ADP data is not a reliable guide to the payroll though December’s revised ADP gain of 176k is closer to a 223k increase in December’s private payroll than the 122k reported last month by ADP.
Looking at its January data, ADP saw a dichotomy between strength in consumer facing industries but weaker job growth in business services and production, and that is consistent with the Q4 GDP detail. Trade, transport and utilities, with a 56k rise, and leisure and hospitality, up by 54k, led January’s ADP gain, Manufacturing at -13k was the only significant negative.
