The US private sector saw the most substantial job growth since September, ADP says

The ADP report showed US private sector employment rising by 742K in April from 565K a month earlier (revised from 517K).

Of the last 12 reports, nine were weaker than expected, but often Friday’s official report did not disappoint the markets. Designed to be a reliable benchmark ahead of NFP, today’s ADP report probably needs calibration.

After the release, there is a moderate demand for risk recovery in markets with a weaker dollar and increased stocks.

Traders probably consider that lately, the ADP paints a slightly gloomier picture of the labour market. Therefore they are looking positively at the biggest increase since September, according to this metric.

Over the past year, ADP estimates have been on average 30% lower than official figures for the whole economy, and in March, that difference rose to 77%. That sets up a gain of 1.0-1.3m on Friday’s NFP, with a high chance of being near the upper end of the range, while early analysts’ forecasts had suggested 950K.

The FxPro Analyst Team