What does the ADP employment result mean for nonfarm payrolls? - Nomura

Analysts at Westpac noted that the ADP employment report indicated that private sector employment increased by 178k in July (Nomura: 170k, Consensus: 190k).

Key Quotes:

"The strength was relatively broad-based—the only subsector to show a decline was manufacturing (-4k), which could be related to higher than usual summer factory shutdowns by automakers.

In particular, professional & business services (+65k), education & health services (+43k) and trade, transportation & utilities (+24k) contributed significantly to headline growth.

Today’s report indicates that the labor market continues to grow at a pace above the level needed to absorb labor force growth.

As the ADP report was in line with our expectations, we continue to expect the BLS to report an increase of 175k in nonfarm payroll employment, of which 170k will be from the private sector..."