ADP: May Payrolls Could Be below 180,000

About ADP National Employment Report

ADP, a human capital management solution provider, releases a monthly report on the US non-farm employment. Changes to the level of hiring and the number of jobs added across different sectors are captured in this report. This organization claims to process the payrolls of more than 24 million US workers, which gives it a unique first-hand insight into the US employment market. This monthly report is prepared by using actual, anonymous payroll data of 411,000 US clients that ADP services. This report is released two days before the Bureau of Labor Statistics’ (or BLS) monthly non-farm payrolls and gives investors an idea about any possible surprises in the BLS report.

ADP: May Payrolls Could Be below 180,000

Latest ADP report highlights

According to the ADP National Employment Report, the US private sector added 178,000 jobs in May. The number of jobs added in May is a slight improvement from the downward revised April addition of 163,000 jobs. As per the comments of Ahu Yildirmaz, the vice president and co-head of ADP Research Institute, the hot job market cooled slightly in May. Small and medium-sized businesses (IJH) continue to add more jobs than large businesses (IWD). Except for trade, transportation (IYT), and utilities (XLU), all other sectors were reported to have added jobs in May.

Jobs data could impact bond yields

Investors are likely to remain focused on the average hourly earnings rather than on the actual number of jobs being added, as unemployment levels are at the lowest level in decades. US bond (BND) yields that have cooled off after the recent FOMC meeting minutes are likely to remain under pressure if the jobs report fails to deliver a positive surprise. In the next part of this series, we’ll take a closer look at the ADP employment report and understand which sector had the most job gains in May.