US: ADP report poses upside risks for NFP - Nomura

Analysts at Nomura note that US ADP private employment increased 241k in March, above expectations (Nomura: 110k, Consensus: 210k).

Key Quotes

“Note that ADP did not show much of a weather effect in February, in contrast to the BLS official report, making the March report somewhat more difficult to interpret. That said, strength across industries was broad based. Goods producing industries added 65k in employment, driven by strong gains in construction (+31k) and manufacturing (+29k). The service sector added an additional 176k as trade, transportation & utilities and professional & business services both notched +40k or above.”

“The ADP report poses some upside risk to Friday’s BLS March employment report. However, weather is likely to still play a role in March and ADP has historically had a difficult time capturing weather effects. Last year, when weather payback resulted in a sharp miss on March private nonfarm payroll employment, ADP reported a gain that month of 263k, well above the as-reported value of 89k. We forecast an increase of 140k in nonfarm payroll employment for March.”