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US ADP Employment Change Spikes to Highest Level since April 2014

US ADP Employment Change Spikes to Highest Level since April 2014

Dylan Jusino, Contributor


Talking Points:

- ADP Employment Change for February exceeded forecasts by +113K jobs at +298K.

- The strong employment data ‘locks in’ a rate hike next week.

- See the DailyFX Economic Calendar for upcoming economic data and for a schedule of live coverage see the DailyFX Webinar Calendar.

With the US Nonfarm Payrolls report two days away, the February US ADP Employment Change exceeded forecasts coming in at +298K jobs created, up from +261K in January. This marked the strongest single-month job creation in the US since April 2014 as the headline figure exceeded estimates by +113K.

Looking ahead at next week’s FOMC meeting, this data is favorable for the rate hike as the Federal Reserve looks for strong signs of economic growth. Fed Chair Janet Yellen stated last week, “given how close we are to meeting our statutory goals, and in the absence of new developments that might materially worsen the economic outlook, the process of scaling back accommodation likely will not be as slow as it was in 2015 and 2016.”

The US Nonfarm Payrolls report will be released this Friday, which is the last piece of data the Fed will assess prior to the FOMC meeting next week. Following today’s labor data, Fed funds futures are pricing in a 100% chance of a rate hike next week.

Senior Currency Strategist Christopher Vecchio will be covering the US labor data live on Friday, March 10 at 8:15 EST/13:15 GMT – you can register here.

Here’s a summary of today’s US economic figures that have lifted the DXY Index back above 102.00:

- USD ADP Employment Change (FEB): +298K versus +185K expected, from +245K.

- USD Non-Farm Productivity (4Q F): +1.3% versus +1.5%, unch from +1.3% (q/q).

- USD Unit Labor Costs (4Q F): +1.7% versus +1.6% expected, unch from +1.7% (q/q).

Chart 1: EUR/USD 1-minute Chart (March 8, 2017 Intraday)

Immediately following the data, the US Dollar spiked against the Euro, though the pair retraced back to previous levels soon after. EUR/USD dropped from 1.0556 ahead of the release to as low as 1.0544 thereafter. At the time this report was written, the pair was trading at 1.0542.

Read more: Calm Before the Storm: Euro, US Dollar Steady Ahead of ECB, NFPs

--- Written by Dylan Jusino, DailyFX Research

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.