The U.S. dollar is declining against the euro and U.S. futures are solidly green following the release of today’s weaker than expected employment from private payroll processor ADP that some investors believe is a precursor to Friday’s employment report from the Department of Labor.
Weak employment data is perceived to be a catalyst for the U.S. Federal Reserve delaying an interest rate hike in 2015.
Today’s ADP report for July was clearly weaker than expected. Private sector employment growth increased by 185,000 in July, missing the forecast of 240,000 from briefing.com.
“July employment growth was slower than June, but is still in line with what we have seen since the first of the year” said Carlos Rodriguez, President and CEO of ADP.
“Notably, large businesses with 500 employees had their strongest job gains since last December and were almost double the June number” Rodriguez added.
Mark Zandi, chief economist at Moody’s Analytics remained upbeat despite the weaker employment figures in July.
“Job growth is strong but it has moderated since the beginning of the year. Layoffs in the energy sector and weaker job gains in the manufacturing sector are behind the slowdown. Nonetheless, even at this slower pace of growth, the labor market is fast approaching full employment” Zandi said.