While month-to-month movements in ADP and BLS payrolls could be out of sync, both series point to a sustained strong trend in job creation. Yet the ADP employment report recently indicated a significant deceleration in job growth among small firms (see chart). A strong pickup in job growth at the start of the year, followed by a deceleration could reflect diminishing expectations for policy action. Expectations rose after the election and have subsided of late, particularly amid the failure to repeal Obamacare.Consensus expects a pickup in the private sector job growth in July to 190k from 158k prior. While the overall trend remains solid, the sectoral detail -- whether it is goods vs. services or the distribution by company size -- is key to understanding future growth trends.
The economic cycle is in its ninth year, but is not yet displaying late-cycle characteristics, such
as significant wage pressures, high inflation or a restrictive level of interest rates. BI Economics
projects consumer spending to remain a dominant growth engine; however, improving contributions from other domestic drivers, including housing and business investment, will enable GDP growth to push further above trend for the foreseeable future. Fiscal policy could boost growth further, if it is enacted.
Most of the analysts are expecting the number to show increase of the newly employeed
Source: Bloomberg Pro Terminal
Trader Bozhidar Arabadzhiev
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