ATFX - "small non-farm" data is off the charts again! Signals the Federal Reserve wants to see

Although the "small non-farmers" were off the charts again, investors showed restraint. More importantly, the report also sent a signal that the Federal Reserve wanted to see...

At 8:15 p.m. on Wednesday, the June ADP payrolls in the United States, known as "small non-farmers"Recorded 324,000, 185,000 again far exceeded market expectations, exceeding expectations for the fourth consecutive month. In addition, the previous value was revised down from 497,000 to 455,000。

However, in view of the ADP data that exploded last month and was not confirmed by the non-agricultural data released later, the data did not cause major market fluctuations after the release. Spot gold fell only $4.5 in the short term, and is now at $1947.3/ounce. Non-US currencies fell, and the euro fell 20 points against the dollar in the short term, and is now at 1.0971; the pound fell nearly 30 points against the dollar in the short term, and is now at 1.2751; the dollar rose 40 points against the yen in the short term, and is now at 143.07. The yield of the US 2-year Treasury bond rose to 4.895% after the employment data was released; the yield of the 10-year Treasury bond soared to 4.035%.

COMEX most active gold futures contract Beijing time on August 2nd 20:15 within a minute trading disk instantly traded 2134 lots, the total value of the transaction contract 415 million dollars, the specific situation please check the gold ten data website at the bottom right volume.

Breakdown data showed manufacturing employment fell by 36,000 in July and 42,000 in June. The median annual rate of wage growth for those employed in manufacturing was 5.7%, compared with 5.9% in June. Trade/transportation/utilities employment rose 30,000, up 90,000 in June. The median annual rate of wage growth for those employed in trade/transportation/utilities was 6.0%, compared with 6.3% in June. Financial services employment fell 5,000, down 16,000 in June. The median annual rate of wage growth for those employed in financial services was 6.4%, compared with 6.7% in June. Professional/business services employment rose 5,000, down 5,000 in June. Construction payroll employment grew at a median annual rate of 6.4%, compared with 6.7% in June. The median annual rate of wage growth for professional/business service workers was 6.0%, compared with 6.2% in June.

ADP, an automated data processing company, said job growth remained strong in July, with the leisure and hospitality sector again driving job growth.Manufacturing, an interest-rate-sensitive sector, is performing weakly, and the sector has been cutting jobs for the fifth consecutive month.The wages of employed people rose by 6.2% year-on-year, which isThe slowest growth rate since November 2021.For people who change jobs,Wage growth slowed to 10.2%.。

Nela Richardson, chief economist at ADP, said the economy was performing better than expected and a healthy labour market continued to support household spending. In addition, "we continue to see slower wage growth in the absence of mass unemployment", which is clearly a good sign for the Fed.

Financial website Forexlive commented:

"Once again, the ADP jobs data has been a big surprise. That doesn't necessarily mean Friday's non-farm payrolls report will be strong, but it's certainly not a sign that the U.S. economy is faltering."

The agency commented that the number of private jobs in the United States rose more than expected in July.Showing that the job market continues to remain resilient could save the economy from recessionDespite the Federal Reserve raising rates by 525 basis points since March 2022, the labor market is only gradually slowing

However, some commentators pointed out that,Perhaps last month's "weak" non-farm payroll data was an anomaly.The ADP survey showed that employment rose by 324,000 last month, higher than expected, easily beating Friday's non-farm forecast of 200,000.Even the June ADP revision was much higher than the overall jobs data for the month, which overall poses some upside risks to Friday's non-farm payroll dataThe small rally in US Treasury yields is understandable, but it is expected to be quite short-lived, and how the market trades today The news of the US rating downgrade (Fitch) will be the main driver of yield movementsThe probability of the Federal Reserve raising interest rates in September rose slightly.

The private jobs report, produced by ADP in collaboration with the Stanford Digital Economy Lab, is known for its rocky relationship with official reportingEd Al-Hussainy, global rates strategist at Columbia Threadneedle, said after the report's growth spurt last month was falsified by the subsequent non-farm payroll report:

"Never trade on ADP data, it's a bad non-farm outlook."