Initial Analyst Reactions To ADP Figures

Initial reaction to ADP employment data:

• BMO: The lowest print since January 2021 and a figure that will weigh on payrolls estimates for Friday. Wage gains continued their slide with job stayers dropping to 5.9% from 6.0% (lowest since Sep 2021), and job changers declined to 9.0% from 9.7% (lowest since June 2021). A positive indication of the Fed's pursuit of more measured wage growth and another detail showing the lagged influence of tighter policy.
• J.P.Morgan: Leaving aside the loose relationship between the ADP and BLS data, the ADP figures do show a moderating trend for job growth in recent months, which we think is very roughly consistent with what should be going on in the labor market. The September monthly change was the softest monthly reading since early-2021, and the three-month average for job growth in the ADP report came in at 194,000 in September, the most modest such figure since March.
• Pantheon: The September print is the lowest since January 2021, but there is zero statistical justification for changing our 175K private payroll forecast for Friday. ADP might be right, but that is not knowable in advance, and it could just as easily be very wrong. In any event, the biggest identifiable source of upside risk for Friday’s headline print is state and local government education jobs, where the seasonal patterns look extremely favorable.