US Macroeconomic Data: ADP Report Shows Sharp Cooling of the Labor Market
The latest release on the US labor market from ADP for November showed a significantly weaker result than expected.
Actual Value: −32 thousand.
Forecast: +5 thousand.
Previous Value: +42 thousand.
The decline in employment in the non-farm sector signals a noticeable cooling of the labor market. This intensifies the discussion about the pace of economic slowdown and opens additional space for a more dovish Fed policy in the coming months.
The drop in the indicator may influence the committee's position when making a decision on the rate on December 9. The market is seeing rising expectations for a deepening cycle of monetary policy easing, especially against the backdrop of weak ISM data and a negative trend in the manufacturing sector.
ADP does not always perfectly correlate with the official NFP, however, under current conditions, weak indicators become an important signal for investors. The market's reaction in the coming days will depend on whether other macro indicators confirm the trend towards economic slowdown.