The ADP National Employment Report is published monthly by the ADP Research Institute. The report provides an estimate of US non-farm employment based in the private sector. Since the report began to be published in 2006, its total private sector non-farm employment figures have exhibited a high correlation with the Bureau of Labor Statistics (BLS) non-farm payroll figures which are typically published a day or two later.
The latest figures indicate private sector employment grew by 195,000 in August, well above the expected figure of 143,000. The new figures represent an improvement on July’s increase of 141,600 after it was revised down by 14,000.
Westpac described the report’s figures as “underscoring ongoing US labour market resilience.”
The report came on the same day as China announced it was willing to resume trade discussions with the US in early October. Equity markets rallied and US Treasury bond yields moved noticeably higher. By the end of the day, 2-year Treasury bond yields were 8bps higher at 1.52%, the 10-year yield gained 9bps to 1.56% and the 30-year yields increased by 8bps to 2.05%.
In terms of Federal Reserve monetary policy, the likelihood of rate cuts in the near time remained high. The implied probability of a 25bps cut or greater at the FOMC’s September meeting remained at 100% but the likelihood of another additional cut at the December meeting fell from 86% to 82%.