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First Cut: ADP National Employment Report offers a disappointing 102,000 increase in June

The ADP National Employment Report put private payrolls at up 102,000 in June after up 41,000 in May (previously 27,000). The headline is a disappointment compared to market expectations and may well result in some downward revisions to forecasts for the June Employment Situation (Friday, July 5 at 8:30 ET).  However, an above-100,000 report leaves increases in private payrolls consistent with Fed policymakers’ views of sufficient growth to absorb new workers into the labor force.

Although the ADP number can see some big misses, it does usually lead the direction of the government report. The current median in market surveys for private payrolls is up about 150,000. This data could shave that down significantly.

Service providers added 117,000 to payrolls in June, a healthy enough level. There were significant gains in professional and business services (32,000), education and healthcare (55,000), and trade and transportation (23,000).

Goods providers saw a rise in manufacturing (7,000) more than offset by declines in construction (18,000) and natural resources (4,000).

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