The U.S. Dollar received a small temporary boost yesterday from the release of the monthly ADP Non-Farm Employment Change data showing that the U.S. had a net monthly change of 177,000 more people in employment, just slightly ahead of the consensus forecast which was 174,000. This will probably have slightly stiffened expectations of a positive number upon the true data release due this coming Friday.
The data is provided by Automated Data Processing Inc. a payroll specialist company. They derive the number two days in advance of the official figure release by composing an estimate of payrolls outside the farming industry and public sector, analysing data from over 400,000 customers to complete their projection.
Regardless of the market’s expectation, the essential creation of 174,000 new jobs would be a healthy indicator for the U.S. economy as a whole, strengthening the case that the U.S. is indeed moving towards full employment if not quite there yet, and also of course strengthening the case for a possible rate hike as early as this month.
Final Non-Farm Employment Change Data Due Friday
The market now looks ahead to the official release on Friday, which is packaged with data on Average Hourly Earnings and the Unemployment Rate. The consensus forecast is for 186,000 net new jobs. As we are at the end of the holiday season and the start of a new month, we can expect some significant capital flows to occur before markets close at the end of this week. Therefore, whatever the results show on Friday, strong moves in the market will almost certainly be triggered.