Forex - Implications of US Nov ADP Employment - Slowing in trend continues


 13:46 (GMT) 04 Dec

  [Economic Data]

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ADP extends a slowing in trend, had been underperforming payrolls recently.

Implications of US Nov ADP Employment - Slowing in trend continues (0101-QDDG-C01)

Nov's 67k increase in ADP's estimate for private sector growth was well below consensus and the slowest since May, and unlike May's weakness was not following an above trend preceding month.

Implications of US Nov ADP Employment - Slowing in trend continues (0101-QDDG-C05)

The 6 month average of 120k edged up as May dropped out, but trend has clearly slowed. The 6 month average ended a streak of 14 straight months above 200k in Apr.

Implications of US Nov ADP Employment - Slowing in trend continues (0101-QDDG-C06)

Oct was revised marginally lower to 121k from 125k though Sep was revised up to 124k from 93k. If our 180k forecast for Nov private sector non-farm payrolls proves correct this will be a 113k outperformance of the ADP, though excluding the return of 46k strikers at GM the outperformance would be a less exceptional 67k. ADP data has been underperforming payrolls recently. Oct underperformed by 10k though excluding strikers ADP underperformed by 56k in Oct.

Implications of US Nov ADP Employment - Slowing in trend continues (0101-QDDG-C02)

The ADP breakdown showed a fall of 18k in goods and a rise of 85k in services.

Implications of US Nov ADP Employment - Slowing in trend continues (0101-QDDG-C03)

Goods saw declines of 6k each in manufacturing, construction and natural resources/mining, a second straight decline in construction perhaps the biggest surprise given recent positive housing market signals (business investment weakness may be providing an offset).

Implications of US Nov ADP Employment - Slowing in trend continues (0101-QDDG-C04)

The most notable weakness in the services breakdown was a fall of 15k in trade, transport and retail, a change of tone after 5 straight solid gains and a warning that improvement in this sector in the non-farm payroll in the last 2 months may not be sustained.


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