FXstreet.com (Barcelona) - After two months of spectacular increase in job creation, the US work market will post the weakest payroll increase since August, according to the latest ADP employment report.
Non farm private sector jobs increased by 40,000 from November to December, following a 173,000 increase in November, revised down from the previously estimated 189,000 increase. Decembers's increase shows a slow down in work creation pace when compared with the 118,000 average posted in the previous thee months.
Private employment in the services sector increased by 71,000, while in the goods producing sector, employment decreased by 31,000. Manufacturing employment fell by 16,000.
According to Ian Shepherdson, Chief U.S. Economist at High Frequency Economics, Ltd, this weak number advances an increase on payrolls not larger than 50K: We had expected an even weaker number, largely because we feared a correction after the implausibly big 173K gain in November. Still, this is quite soft and we are not changing our view that the headline payroll number tomorrow will be only 50K or so.
Furthermore, Shepherdson forecasts negative figures in payroll numbers over the next months: The continued decline in help wanted and the strengthening upward trend in jobless claims suggest that it is now just a matter of a very few months before the first negative payroll numbers start to appear. Nothing is better at keeing the Fed easing than falling payrolls.