US ADP employment: A moderate deceleration in job creations - Natixis

Research Team at Natixis notes that the US ADP employment increased by 153K in December (after 215K in November), below consensus expectations.

Key Quotes

“Job gains decelerated in the services sector and contracted again in the goods producing sector. Given the usual discrepancies between ADP and private NFP and as suggested by other leading indicators, we maintain our call for total NFP employment growth to slowdown in December (we forecast +150K).”

“ADP employment increased by 153K in December (after 211K in November, revised downward from 126K), below consensus expectations (175K) but above ours (140K). The slowdown was driven by both the deceleration in services sector employment (dragged down mainly by professional & business and administrative & support activities) and the job destruction in good producing sector (with contraction in both construction and manufacturing).”  

“All in all, report is consistent with a moderate slowdown in job creations in December. Given the usual discrepancies between ADP and private NFP, we expect NFP to increase by 150K in December (vs. 178K in November).  In a separate report, initial jobless claims declined to 235K, close to the lowest level since the 70s. Therefore, even though job creations are slowing down, no doubt labor market conditions remain healthy.”