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ADP Report May Point to Improved Non-Farm Payrolls

The ADP Employment Reportindicated a decline of 84K in private sector payrolls in December , compared to a revised drop of 145K a month prior November. This is the lowest level of declines since March 2008.  It is unlikely this release will impact Friday's forecast for no change in non-farm payrolls.  Over the past six months the ADP report has generally been under-performing non-farm payrolls, so the fact that ADP has improved could imply further improvement for December's payrolls.  The non-manufacturing ISM's employment index at 10:00AM should provide additional hints towards Fridays non-farm payroll outcome.

This chart highlights how the ADP report has generally underperformed non-farm payrolls since July.


Source: St. Louis Fed



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