ADP US Sept. Private Employment Falls 32,000, Est. +51k

ADP US Sept. Private Employment Falls 32,000, Est. +51k

The ADP Employment Change report for September, released on Wednesday at 12:15 GMT, indicated a significant slowdown in US private sector employment growth. The report showed a decrease of 32,000 jobs, falling short of market expectations of a 51,000 increase .

This data point adds to the growing evidence of a weakening labor market in the US. The ADP report is closely watched by financial markets as it often provides insights into the upcoming Nonfarm Payrolls (NFP) report, which is scheduled for release on Friday. The NFP report, which measures the total number of nonfarm employees in the US, is considered a key indicator of the health of the US economy.

The US Dollar Index (DXY), which measures the value of the Greenback against a basket of major currencies, has been under pressure. The DXY depreciated nearly 1% since the release of a moderate US Personal Consumption Expenditures (PCE) Price Index on Friday, and amid concerns about a potential US government shutdown . The weak ADP employment report is likely to further weaken the USD, as it suggests that the US economy needs additional monetary stimulus.

Institutional investors have shown increased confidence in Automatic Data Processing Inc. (ADP), the company that releases the ADP Employment Change report. Cove Private Wealth LLC acquired 1,026 shares of ADP for approximately $316,000 in the second quarter, highlighting the company's strong financial performance . The company reported an earnings per share of $2.26 for the last quarter, surpassing expectations by $0.03, with quarterly revenue rising by 6.3% year-over-year.

The Federal Reserve (Fed) is expected to continue its dovish stance, with financial markets nearly fully pricing in a rate cut in late October. The CME Group’s Fed Watch tool is pricing in a 90% chance of a quarter-point easing move in October . The weak ADP report is likely to provide further arguments for the Fed to ease its monetary policy further.

The US labor market is facing significant challenges, with employment growth plummeting in the second half of the year. The Unemployment Rate increased to 4.3% in August, its highest level in four years, confirming a deterioration in the labor market . This data will likely influence the Fed's monetary policy decisions in the coming months.