According to the ADP employment report, employment rose by 91 000 in the US private sector in August compared to 109 000 in July, which was marginally below the consensus estimate. The details show that employment contracted for a second consecutive month in the manufacturing sector (-4 000 from -2 000), while employment picked up in the wider goods-producing sector (11 000 from -2 000). In the service providing sector employment growth slowed to 80 000 in August (from 111 000).
Employment rose by 58 000 across small firms, broadly unchanged from the previous month (59 000), while the rate of growth slowed from 41 000 to 30 000 across medium size firms. In large firms, employment rose only marginally in August, by 3 000 from 9 000 in July.
The ADP said that the figures didn’t reflect the labour dispute that affected roughly 45 000 workers at (36,17 USD, -0,39%). As the correlation between the ADP and official BLS report was not always so tight recently, it is difficult to draw strong conclusions for the payrolls tomorrow. Overall we believe however that the ADP report is not too bad (glass half full), but we stick to our view that a downward surprise in the payrolls is not excluded.