US ADP nonfarm payrolls beat estimates, but wage growth slows

The U.S. ADP nonfarm payrolls change report came in slightly better than expected, with a gain of 143,000 jobs versus the consensus of 126,000 for September. This was also higher than the previous month’s net increase of 103,000 jobs.

This marked the first better-than-expected reading in five months as the manufacturing sector added positions for the first time since April, while only the information industry reported losses.

Link to ADP Non-Farm Employment Report for September

The components of the report also showed that wage growth was 4.7 percent annually, down from 7.6 percent wage gains in August.

ADP Chief Economist Nela Richardson mentioned this “Stronger employment did not necessitate stronger wage growth last month. Workers who change jobs typically experience faster wage growth. But their premium to people staying in the job fell to 1.9 percent, equal to a low last seen in January.”

Market reactions

USD chart overlay against major currencies by TradingView

The US dollar, which moved sideways against most of its peers (except the yen and franc) ahead of the ADP report, drew some support after seeing stronger-than-expected numbers.

USD/JPY and USD/CHF broke out of the brief consolidation and extended their rally, while the greenback managed to hold on to post-ADP gains in the coming hours. However, USD/CAD continued to move sideways as the oil-linked Loonie also benefited from a rally in the energy commodity.