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ADP Employment: Weaker Than Expected on Slower Job Gains in Trade

October 5, 2016

Bottom Line: Private sector employment rose moderately in September, less than expected as Professional/Business service hiring remained below trend and the trade/transport/utilities sector, already weakened by the decline in oil prices over the last two years, grew at its slowest pace in over 3 years as the Hanjin Shipping bankruptcy rippled through the trade sector . ADP data do not account for government workers which are included in the Employment Situation headline number. This report leaves slight downside risk to the consensus estimates for Friday's non-farm-payroll report, currently expected to show a gain of 174k jobs in September.

ADP National Employment ROSE by 154k in September, compared with market expectations for a gains of 165k. Meanwhile, the revisions to the prior 3 months subtracted an additional 1k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 190k per month, lifting employment to 1.9% ABOVE its year ago level.

Jobs in Goods-Producing Industries ROSE by 3k jobs but Manufacturing LOST 6k workers. Moreover, Construction gained 11k jobs.

Meanwhile, Service-Producing Industries ROSE by 151k jobs with Professional/Business Services hiring 45k workers, Trade/Transport/Utilities adding 15k, and Financial Activities increasing by 11k workers.

Small Firms hired 34k workers, Medium-Sized Firms grew by 56k employees while Large Firms added 64k positions.

Article by Contingent Macro Advisors