According to the latest data reported by American private payroll processor ADP, 179,000 jobs were added during July, slightly above the 170,000 foretasted. Even though the ADP report and the nonfarm payroll do not necessarily always exhibit the strongest of direct correlations, the ADP figure is a great primary indicator for how Friday’s nonfarm payroll number from the Bureau of Labor Statistics may perform. Over the last year, ADP has correctly predicted the direction of the nonfarm payroll report with a success rate of 83%, adding to evidence of its importance as a leading indicator for the crucial upcoming employment data.
Following the ADP announcement, the US dollar instantly strengthened against a basket of currencies, helping to snap a substantial losing streak following last week’s preliminary GDP report. GBPUSD was trading at 1.3308, retreating from earlier highs of 1.3346 while EURUSD also pulled back to 1.191 from 1.202 minutes after the report. After a number of poor data points following last Friday’s GDP report, the US economy desperately needs some bullish data from the NFP this week. While the forecast as of late Wednesday for July’s job creation is trending near 180,000, it remains well below the 287,000 jobs added in June, aiding speculation that the Federal Reserve may be forced to postpone interest rate normalization until the middle of 2017 at the very earliest.
Much Needed Positive News Arrives After ADP Nonfarm Employment Beats Estimates
Market Trends - 03/08/2016