7 May 2015
US NFP expected to print a 225k+ outcome – DB
FXStreet (Barcelona) - Economists at Deutsche Bank, review the US ADP employment data and further view the sturdy services sector supporting their forecast for a 225k+ nonfarm payroll gain.
Key Quotes
“The ADP employment survey showed only a 169k increase in private sector payrolls in April—the smallest gain since January 2014 (157k). This was accompanied by a cumulative -26k in downward revisions to the prior two months.”
“Manufacturing sector employment within the ADP report has been particularly soft over the past two months, declining by -3k and -10k in March and April, respectively. This is not all that surprising given the employment subcomponent of the manufacturing ISM survey fell to 48.3 last month, which was the lowest level since September 2009 (47.8).”
“In our view, the recent weakness in manufacturing employment is largely due to a pullback in energy-related hiring as production has declined meaningfully over the past several months. Case in point, the oil- and gas-well drilling series within the Federal Reserve’s industrial production report plunged nearly -70% at an annualized rate last quarter.”
“While the manufacturing sector has clearly slowed over the past several months, the service sector, which accounts for nearly 85% of private employment, has remained sturdy. This is one reason we continue to expect a +225k nonfarm payroll gain when the April data are released tomorrow morning.”
Key Quotes
“The ADP employment survey showed only a 169k increase in private sector payrolls in April—the smallest gain since January 2014 (157k). This was accompanied by a cumulative -26k in downward revisions to the prior two months.”
“Manufacturing sector employment within the ADP report has been particularly soft over the past two months, declining by -3k and -10k in March and April, respectively. This is not all that surprising given the employment subcomponent of the manufacturing ISM survey fell to 48.3 last month, which was the lowest level since September 2009 (47.8).”
“In our view, the recent weakness in manufacturing employment is largely due to a pullback in energy-related hiring as production has declined meaningfully over the past several months. Case in point, the oil- and gas-well drilling series within the Federal Reserve’s industrial production report plunged nearly -70% at an annualized rate last quarter.”
“While the manufacturing sector has clearly slowed over the past several months, the service sector, which accounts for nearly 85% of private employment, has remained sturdy. This is one reason we continue to expect a +225k nonfarm payroll gain when the April data are released tomorrow morning.”