The ADP National Employment Report is published monthly by the ADP Research Institute. The report provides an estimate of US non-farm private employment based on actual payroll data. Since the report began to be published in 2006, its total private sector non-farm employment figures have exhibited a high correlation with BLS NFP employment figures.
The October figures have now been released. Private sector employment grew by 227,000, a figure which was higher than the expected figure of 190,000. Of these new jobs, 17% were in the manufacturing sector, with most of the increase evenly shared between mid-sized businesses with 50-499 employees and large businesses with 500 or more employees.
Market reaction to the figures was subdued but generally positive. US 2-year Treasury bond yields finished the day 3bps higher at 2.88%, while 10-year and 30-year bond yields each finished 2bps higher at 3.14% and 3.38% respectively. According to CME Group, the probability of a 25bps rate rise before the end of 2018 was unchanged at around 74% after the report’s release. However, cash futures prices implied an increase in the chance of an additional 25bps increase at the FOMC’s March meeting to back over 50%.