U.S. private-sector employment increased by 38,000 jobs in the latest reporting period, according to the ADP National Employment Report, coming in below market expectations.
Economists had forecast an increase of approximately 47,000 jobs.
The latest figure also represented a slowdown from the previous month, when private-sector employment increased by 46,000 jobs.
The ADP report is based on payroll information from approximately 400,000 U.S. business clients and provides one measure of employment conditions ahead of the government’s broader non-farm payroll report.
Private-Sector Job Growth Slows From Previous Month
The increase of 38,000 jobs indicates that private-sector employment continued to expand during the period, although at a slower rate than in the previous month and below economists’ forecasts.
The figures provide additional information about current U.S. labour-market conditions. However, a single ADP report does not by itself establish a broader deterioration or improvement in the employment market.
Employment conditions can vary across industries and reporting periods, while subsequent data may provide a more complete picture of hiring activity.
Markets Await Government Employment Report
Investors and policymakers will next turn their attention to the government’s non-farm payroll report for additional information about employment conditions.
The ADP report and official government employment figures are produced using different methodologies and can produce different results. As a result, the latest ADP reading does not necessarily predict the outcome of the upcoming government report.
Market participants are expected to compare the two sets of figures as they assess employment growth and the broader economic outlook.
Employment Data Could Factor Into Monetary Policy Assessment
Labour-market conditions remain one of the economic indicators considered by policymakers when assessing monetary policy alongside inflation and other measures of economic activity.
The weaker-than-forecast ADP reading could therefore contribute to market expectations surrounding the economic and interest-rate outlook.
However, the data alone do not establish the direction of future monetary policy decisions or movements in the U.S. dollar. Those outcomes will depend on additional economic information, market conditions and policymakers’ assessments.
The upcoming government employment report is expected to provide further evidence on the pace of U.S. job creation and the condition of the labour market.