The Automatic Data Processing (ADP) Research Institute is set to release private employment data for February on Wednesday. This independent estimate of private-sector employment and pay is often considered a precursor to the Bureau of Labor Statistics’ (BLS) official jobs report, featuring Nonfarm Payrolls (NFP) data.
While the correlation between ADP Employment Change and NFP numbers can be inconsistent, market participants still closely monitor the ADP figures as part of the array of employment-related releases leading up to the NFP publication.
In January, the ADP reported a rise of 107,000 in private-sector employment, falling short of the market’s expectation of 145,000. Meanwhile, the NFP data for the same period exceeded estimates, increasing by 353,000.
After keeping policy settings unchanged in January, Federal Reserve (Fed) Chairman Jerome Powell signaled a reluctance to initiate a policy rate reduction as early as March during the post-meeting press conference. Powell noted that an unexpected weakening in the labor market could prompt rate cuts sooner. The robust labor market data for January reinforced a delay in the Fed’s policy pivot, contributing to the US Dollar’s resilience against other currencies in early February.
