The ADP Employment Change will likely have a limited impact on financial markets. The US private sector is expected to have added 139,000 new positions in December. The US Dollar Index corrected extreme overbought conditions, retains its bullish stance. Financial markets slowly return from the winter holidays and the macroeconomic calendar starts to be packed. These days, the focus has been on the United States (US) and President-elect Donald Trump’s proposed tariffs.
Market sentiment has led the way in the absence of relevant data, with the mood seesawing between hopes and despair of what the new US administration would mean to the global economy. US employment, however, is taking centre stage. The ADP Research Institute will release the December Employment Change report on Wednesday, a survey that estimates the number of new jobs created by the private sector. It is worth remembering that the ADP report is typically released two days before the official Nonfarm Payrolls (NFP) report. The ADP data is often viewed as an early preview of the Bureau of Labor Statistics (BLS) jobs report. However, the connection between the two has proven inconsistent over time. Employment growth and its role in shaping Fed policy Employment is critical, as is one of the two legs of the Federal Reserve’s (Fed) dual mandate. The US central bank should maintain price stability and pursue maximum employment. As inflationary pressures receded, the focus temporarily shifted to employment in the second quarter of 2024, as a strong labor market somehow posed a risk to inflation. Still, the focus returned to inflation after the 2024 presidential election. Former president Donald Trump won the run and will return to the White House as the 47th US president in a few days. Not only did he achieve victory, but the Republican party also won control of Congress, leading in both houses