109,000 private-sector jobs were created in April in the United States, according to the monthly ADP report released on Wednesday. That’s 10,000 more than economists surveyed by Reuters had expected. And, more importantly, it’s nearly double the March figure, which was revised to 61,000. This is a first in several months. 💼
🔍 What’s going on?
The ADP report from the HR services firm was released this morning, and it came as a complete surprise. Economists had forecast 99,000 private-sector jobs created in April. The published figure is 109,000, well above the consensus.
March’s figure was revised slightly downward, from 62,000 to 61,000 jobs created. We’re therefore starting from a low base, and this April rebound marks a clear resurgence of momentum in the U.S. labor market.
This ADP report precedes the official Labor Department report expected on Friday. Traders will scrutinize these official figures to adjust their expectations regarding the Fed’s monetary policy.
💡 Why does this matter?
A resilient job market is one less argument for the Fed if it wants to cut rates. For several months now, Jerome Powell has been stressing that the Fed remains data-dependent, meaning it adjusts its policy based on incoming data. An ADP figure above consensus signals that the U.S. economy is holding up better than expected.
The dollar could benefit from this renewed optimism, as U.S. rates will likely remain high for longer. For French traders, this means keeping a close eye on the EUR/USD, which is currently trading at 1.1705 at the time of writing. If Friday’s NFP confirms the ADP trend, we could see the greenback strengthen.
On the ECB side, Christine Lagarde is closely monitoring developments across the Atlantic. A divergence in policy paths between the Fed and the ECB could intensify pressure on the euro if the two central banks diverge further in their rate decisions.
📊 Our view
For us, this ADP figure is a clear signal: the U.S. labor market is not collapsing. Period.
Admittedly, ADP isn’t always the best predictor of the official NFP. Sometimes the two figures diverge. But the trend remains the same: the U.S. economy continues to hire, despite restrictive rates for over a year. The rebound in April compared to March shows that businesses remain confident. If the Labor Department confirms this on Friday with an NFP above 150,000, the Fed will have all the cards in hand to maintain its hawkish stance. In Europe, the ECB could find itself somewhat more isolated if it continues to cut rates while the Fed remains firm. For French traders, we’re keeping a close eye on EUR/USD: a strong NFP on Friday could send the pair below 1.16.
Our advice: don’t bet on a dollar decline until the official NFP is out. If Friday’s data confirms the trend, we could see a USD rally lasting several weeks.
✅ Key takeaway
- The ADP report shows 109,000 private-sector jobs created in April in the United States
- The Reuters consensus forecast was for just 99,000 new jobs
- The March figure was revised down from 62,000 to 61,000 jobs created
- The official Labor Department report is due out on Friday and will be closely scrutinized
- A strong jobs market could boost the dollar against the euro
What do you think? Are you betting on an even stronger NFP report on Friday, or do you think ADP overestimated the reality on the ground?
🔎 See also
For more insights, check out all our economic analyses on ActuTrading Economy 📈
Source: ADP, U.S. Department of Labor, Reuters
