The ADP National Employment Report is a monthly report which provides an estimate of US non-farm employment in the private sector. Since the report began to be published in 2006, its employment figures have exhibited a high correlation with official non-farm payroll figures, although a large difference can arise in any individual month. Even so, the latest report has provided another robust increase.
February’s report indicates private sector employment grew by 183,000, more than the 170,000 which had been expected but less than January’s revised figure of 209,000.
US Treasury yields increased at the long end of the curve while shorter-dated yield remained unmoved as US markets were perceived to welcome a lower likelihood of a Bernie Sanders nomination. By the end of the day, the 2-year Treasury bond yield remained unchanged at 0.69% while the 10-year yield had gained 6bps to 1.06% and the 30-year yield had jumped by 10bps to 1.71%.
In terms of likely US monetary policy, according to federal funds futures contracts another rate cut on top of the emergency cut made on Tuesday is a certainty. The implied likelihood of a 25bps cut at the March meeting of the FOMC remained at 100%.
Employment numbers grew in businesses of all sizes, with a majority of the month’s gain in large businesses. Firms with less than 50 employees added a net 24,000 positions, mid-sized firms (50-499 employees) added 26,000 positions and large businesses (500 or more employees) accounted for 133,000 additional positions