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ADP has released its National Employment Report for the month of June. This is viewed as a key directional indicator each month for the key unemployment and payrolls report from the U.S. Department of Labor’s Bureau of Labor Statistics (BLS). ADP indicated that the total private sector employment increased by 172,000 jobs in June.

What matters here is not just that the number is not very strong, even if it is not a weak number. What matters is that expectations had cratered after less strength has been seen in the last month’s and more recent indicators of employment.

Bloomberg’s consensus estimate was 150,000, and the Econoday range was a wide one of 100,000 to 209,000. Dow Jones (Wall Street Journal) was showing a consensus estimate of 151,000, and Reuters signaled an estimate of 159,000 in its economist poll.

This monthly report is derived from ADP’s actual payroll data, and it measures the change in total nonfarm private employment each month on a seasonally adjusted basis. Yet again, small businesses led the charge. The business groups that contributed gains were as follows:

• Small businesses added 95,000.
• Medium businesses added 52,000.
• Large businesses added 25,000.

Again, traders and investors use this as a directional barometer rather than for an exact number of each BLS report. That being said, Bloomberg’s consensus estimate for June’s nonfarm payrolls is 180,000 and private sector payrolls is 170,000.

Keep in mind that May’s report was incredibly weak. The BLS showed that the government’s number was only 38,000 for nonfarm and 25,000 for private sector payrolls.