The Automatic Data Processing Inc released in its report today that jobs in the private sector have decreased by 23,000 in February compared to the expected rise of 15,000 and January's jump by 119,000 after it was revised downwards from 130,000.

The report came two days before the famous Job's report on Friday where the ADP suggests that the non-farm payrolls increased by 2,000. The services sector posted the best results as it grew by 47,000 new jobs while the goods processing sector fell 70,000 employments and manufacturing shed 40,000. Within the report, growth among medium-sized businesses dropped for the first time since June 2003.

With the massive revisions, and the larger than estimated job's growth by the ADP than the government's estimate, the ADP report is now not seen as a predictor of payrolls but more of a measure of the well-being of the labor market.

In a different report released by the Labor department, the US Unit Labor Cost final reading for the fourth quarter came in at 2.6% higher than the expected and previous rise of 2.1%. Well since it is used as a key gauge of inflationary pressures, the reading is a cry to the Fed's assuring the fact that inflationary risks are still to upside and further cutting in interest rates might help avoid a recession but could lead to stagflation.

Non-farm business productivity increased at a 1.9% rate in the fourth quarter. For 2007 on average, productivity climbed 1.8% from the prior year, up from the previous estimate of 1.6%. On a fourth-quarter annual basis, it increased 2.9%, showing strong growth in the second half of the year. Unit labor costs last year climbed 3.1% on an average annual basis, slightly higher than in 2006.

Another sign that the economy is slowing was witnessed in the report by the Commerce department showing that factory orders fell 2.5% in January as orders for durable goods declined.

Durable goods dropped a revised 5.1% while core capital equipment orders fell in January by 1.5%. Factory orders in January for non-defense capital goods excluding aircraft decreased 1.5%. Non-durable goods factory orders rose in January by 0.3% after falling 0.4% in the previous month. Orders for transportation goods plunged 13.0%. The report indicated that factory shipments increased 1.1% while unfilled orders were up 0.7% which is a sign for future demand.

Although the services activity picked up pace in February, the ISM non-manufacturing composite index still shows contraction as it was released just below the 50 mark at 49.3. January's contraction was the first since March 2003. Business activity index rose to 50.8 this month from 41.9 while new orders also inclined to 49.6 from 43.5. The employment index climbed to 46.9 from 43.9 and according to the price index which fell to 67.9 from 70.7, inflationary pressures eased a bit.

After the release of the ADP employment report, U.S. stock futures gained as S&P 500 futures were up 3.80 points at 1,330.80 and Nasdaq 100 futures were gaining 10.25 points to 1,752.75. In the forex market, the greenback was losing grounds against the majors as it took a dive on the weaker than expected jobs report.

However, now mixed signals are in the markets as the dollar at first gained after the Institute of Supply Management released its report but is starting to reverse as investors are carry trading once again. The greenback is climbing against the Yen but failed to do the same against the rest

Well tomorrow is decisions day for the BoE and ECB so we might witness some new action in the markets. But until Friday, the dollar might seem neutral before choosing the direction to go. With the ADP employment now out, we can pretty much determine where the greenback will go…