
On the first Friday of every month, unless it is a holiday, the Bureau
of Labor Statistics in the USA
announces the Non-farm Payrolls report results for the previous month.
Employment figures are always important economically but they have achieved an
even bigger significance now because the Fed has made it plain that the
tapering or otherwise of Quantitative Easing (QE) will be dependent on what
they show.
So this coming Friday will be eagerly awaited by all traders. Normally,
the day before, the private company, Automatic Data Processing, or ADP, which
has pretty much cornered the market on outsourced payroll solutions in the US , uses its
extensive databases to attempt to anticipate the official figures. The chart
above is the measure to which they have been successful in this.
To be honest, the correlation does not look very good. ADP’s outcomes
seem to be far less volatile than those of the government agency, which are also
often subject to revision in the month following their release.
But traders will fasten on anything that might give an indication of
market direction and for this reason the ADP figures, for better or worse, are
also always closely watched.
This time round they come out on tomorrow, Wednesday, instead of
Thursday. Keep your eye on them. All other traders will be doing the same. They will have a greatly increased impact this month as the US government shutdown will delay the official Non Farm Payrolls report.
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