ADP employment report for December, final hint ahead of Friday's NFP release, was published at 1:15 pm GMT today. While the market expected US employment to increase by 150 thousand jobs, actual data turned out to be a upside surprise. Report showed an addition of just 235 thousand jobs compared to 127 thousand in November. This hints that Fed will remain hawkish and US dollar reacts positively to the data, while US equity futures pulled back.
Service providers added 213K led by leisure and hospitality (123K). Professional and business services grew by 52K, while education and health services added 42K. The goods-producing sector increased by 22K. On the other hand, job losses were seen for trade, transportation and utilities (-24K), natural resources and mining (-14K) and financial activities (-12K). In 2022, payroll growth average nearly 300K a month.
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Open account Try demo Download mobile app Download mobile app“The labor market is strong but fragmented, with hiring varying sharply by industry and establishment size. Business segments that hired aggressively in the first half of 2022 have slowed hiring and in some cases cut jobs in the last month of the year”, said Nela Richardson, ADP chief economist.
Hiring was strong among small and medium businesses while large companies recorded drop in employment of 151,000 jobs.
The report also shows annual wage growth of 7.3% y/y, which according to ADP is the lowest growth since March last year, which is not what the FED would like to see.
The ADP reading has been much lower than the NFP recently, but we are seeing a big rebound today. However, it is worth remembering about the huge difference between the reports carried out among businesses and among households, where employment decreases have been reported in recent months. Source: Bloomberg
EURUSD pair broke below support at 1.0600. Source: xStation5
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