The March ADP Employment Report indicated jobs grew by 8,000 in the private sector. The consensus estimate called for a loss of 45,000. February's rate was revised to a drop of 18,000 from a drop of 23,000.
Though the gain was small, it was a vast improvement from February’s revised job losses of 18,000 reported by a private employment service.
The big number that will sustain the rally or see it turn back to the downside is the Friday job numbers by the Government. It has been a key indicator as to the health of the economy. Some analyst go as far as to use it to help forecast consumer spending. It is also closely watched by the Fed – as a indicator as to inflation and interest rate adjustments. ADP reports their payroll numbers BEFORE the Government data – which HAS been (until recently) pretty good at forecasting the Government data.
The ADP reports shows an UNEXPECTED increase of jobs by companies of 8,000. The forecast was estimated to show a decrease of 45,000 jobs (based on estimates of 24 economist) – this is a HUGE swing to the upside. The economist are now scrambling to adjust their forecasts for the Government Figures due out this Friday (most assuredly to the upside). However – their previous month was revised LOWER by 18,000 jobs. It is ALSO important to note that ADP ONLY counts private sector employment, while the Government Numbers include all work forces.
Quick Break down:
"Today's report showed a decrease of 77,000 jobs in goods- producing industries. Service providers added 85,000 workers. Construction employment dropped by 22,000, bringing the decline since August 2006 to 259,000 jobs. Employment in financial institutions was little changed.
Companies employing more than 499 workers reduced their workforces by 52,000 jobs. Medium-sized businesses, with 50 to 499 employees, added 5,000 jobs and small companies increased payrolls by 55,000.
The ADP report is based on data from 392,000 businesses with about 24 million workers on payrolls. "
Note: The futures spiked initially to the upside when the news was released – but is starting to fall off again. Friday job numbers will sure push this market higher or lower quickly if those numbers are come in different than what’s expected. With the surprising ADP report – expect more volatility.
On Friday we get the Bureau Of Labor Statistics non-farm payroll number for March.
Source: By Market Preview
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