Previous -250 thousand
Forecast -493 thousand
The ADP national employment report is compiled from a subset of ADP (Automatic Data Processing) records for employees working in the private sector.
The data are collected for pay periods that can be through to include the week of the 12th of each month, and it is processed with statistical methodologies similar to those used by the U.S. Bureau of Labor Statistics to compute employment from its monthly survey (the nonfarm payrolls).
ADP contracted with Macroeconomic Advisors design a monthly report that would ultimately help to predict monthly nonfarm payrolls. The ADP report only covers private (excluding government) payrolls at this time.
The ADP report is the closet designed report to help predict the monthly released nonfarm payroll by the BLS. This is why it is mainly looked at in the economy. Nevertheless, since the release of this index it contained huge discrepancies with the actual nonfarm payrolls and for that the report is still starving to gain acceptance in the market.
The release so far gains slight market reaction whether for the currencies or equities market for reasons mentioned above, yet it is starting to grow. The nonfarm payroll is considered the god father of all fundamentals as employment is the corner stone in all economies as it is the solid base from which expansion steams.
For that since the BLS employment report is of huge magnitude the more the ADP proves is at least closely accurate to be dependable in predicting the nonfarm payrolls the more it will attract market reaction. As we know the growth the labor force means the stronger the economy and more money is in hands of the public to spend demanding more goods and providing industries with the reason to expand production all helping to ensure a stronger GDP.
Best Case The ADP employment is going to show that the private sector shed 493 from the prior 250 and the best case scenario would be if the reading comes in lower than expectations because with fewer employees losing jobs means that there is money flowing towards the economy which helps growth as the US depends on spending heavily.
Worst Case When the reading comes higher or inline with expectations is not a good sign for the economy as this undermines growth prospects as a result of lack of money in consumers' hands which therefore leads to less money in the nation leading to sluggish growth like we are witnessing currently.