FXstreet.com (Barcelona) - Non farm employment is expected to have increased by 130,000 workers in the private sector during the month of January, according to the estimation made by Automatic Data Processing.
This increase surpasses the experts expectations of a 40,000 increment, which would be similar to December's 37,000 increase, revised down from the previously estimated 40,000 rise. The three month average shows an increase of 110,000 new jobs in the October December period.
The services sector was the major contributor to this reading, with a 141,000 increase on the month, partially offset by a loss of 11,000 employments on the goods-producing sector, while employment in the manufacturing sector remained flat on the month.
Ian Shepherdson, chief U.S. Economist at High Frequency Economics, Ltd, undersores the relative importance of the ADP estimation: ADP has proved itself horribly misleading several times over the past year but the fact remains that it is the best (least bad, anyway) single advance indicator of payrolls.
Nevertheless, Shepherdson increases his expectations of employment creation once seen the ADP report: Accordingly we are inclined to move up our estimate for the official headline number on Friday to 100K from 50K. The trend in core payroll growth is slowing and will soon dip into negative territory, but in any given month, anything can happen.