ADP Payroll Report - Key to US Market Rally ?
2nd Job Report Dropped.
On the eve of 4th July, US Independence Day, the 2nd jobs report dropped.
The United States (US) Automatic Data Processing (ADP) Research Institute released its monthly report on US private sector job creation for June 2024 on Wed, 03 Jul 2024.
Known as the ADP Employment Change, the report is released 2 days before US official Nonfarm Payroll (NFP) report.
Despite random divergences in the data outcome (on & off), market regard it as an advanced indicator to the Bureau of Labor Statistics (BLS) report.
A strong job creation in the private sector will likely be seen as an upcoming upbeat NFP report and vice versa.
ADP June 2024.
Private payroll growth edged lower in June, indicating a potential slowdown in the US labour market.
Companies added 150,000 jobs, (a) below the upwardly revised 157,000 jobs (May data) and (b) the Dow Jones’s forecast of 160,000 jobs. (see above)
This is the lowest monthly gain since January.
(1) Jobs By Industry.
Leisure & Hospitality is the top contributor, adding 63,000 jobs.
Without the surge from this industry, the total would have been considerably lower.
Other sectors showing gains included (a) Construction (27,000) and (b) Professional & business services (25,000) - rounding up the top 3.
(2) Change in Annual Pay.
The pace of wage gains also moved lower (in June 2024), for those who stayed in their jobs.
It is down to 4.9% on a YoY basis; making it the smallest rise since August 2021.
Job switchers saw a +7.7% increase, a number that also has been trending lower.
JOLTs versus ADP.
Will be jumping in to compare the 2 jobs reports released so far.
Click here ! on JOLTs report details.
Both reports offer insights into the US labour market.
However, they track different aspects of it.
JOLTs:
Tracks job openings and separations (hires, quits, layoffs).
Offers a broader picture but lags actual hiring by a month.
ADP:
Focuses on private sector employment changes (new hires minus separations).
Provides a timelier estimate of recent hiring trends.
Summary:
JOLTs - May actuals came in marginally stronger (+221,000 jobs) compared to April’s 7.919 million jobs (that had been revised downwards).
ADP - June data continued to dip by -7,000 jobs to 150,000 — after “peaking” in April 2024 (192,000). Cooling data suggests a downturn in the private sector labour market.
Both JOLTs and ADP report suggest a cautiously optimistic view of US labor market in July 2024.
Just wait for the official Nonfarm Payrolls report and things will fall into places.
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Do you think US non-farm payroll (June) will dip, like ADP’s June payroll report ?
Do you think the Fed a weaker or stronger Non Farm payroll data for June 2024?
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