Payroll Data Forecasts In Doubt Following ADP Report's Upside Surprise
Forecasts of monthly payroll data expected Thursday were thrown into turmoil by an upside surprise from a similar private survey.
Analysts anticipate on average that numbers from the Bureau of Labor Statistics will creep up only slightly, showing 215,000 new jobs added in the non-farm sector for June compared with 217,000 reported in May. Estimates for the private sector also sit at 215,000 jobs, down very modestly from the 216,000 reported in May.
The consensus calls for no change to May's 6.3 percent unemployment rate.
Street estimates for non-farm range from a high 290,00 new jobs to a low 145,000.
Streets estimates for the private sector range from 285,000 to 140,000.
Traders should remember with each month's payroll figures, the BLS revises both of the prior two month's readings. Revisions for April and May will be important, as the U.S. economy appears to be coming out of its harsh winter during these last couple months.
But doubts were raised about the current consensus by Wednesday's surprisingly high employment data released by payroll processor Automatic Data Processing (NASDAQ: ADP).
The ADP report showed 281,000 jobs added in June, versus a consensus calling for 210,000.
ING's Rob Carnell is among those who believe ADP's Wednesday report may prove misleading. He recalled that November 2012 last saw a similar spike in the ADP survey.
"However, back then, the ADP report gave a false signal for non-farm payrolls, which were virtually unchanged from the previous month," Carnell said in a note carried on FXStreet.com.
Of perhaps greater importance to the markets than employment will be wage trends revealed in Thursday's report.
"Any hint that wages are beginning to pick up could seriously change the market's perceptions about inflation risk and Fed policy," said Carnell.
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