A monthly report from Automatic Data Processing (ADP) estimating private-sector employment changes based on payroll data. Released two days before Non-Farm Payrolls, it serves as an early indicator of the official jobs report.
What the ADP Report Measures
The ADP National Employment Report measures the change in total private non-farm employment, derived from actual anonymized payroll data from approximately 460,000 U.S. businesses. It excludes government hiring and focuses solely on private-sector jobs across all industries and company sizes.
Relationship to NFP
The ADP report is released on the Wednesday before Non-Farm Payrolls (NFP) (Friday), giving traders an early look at employment trends. While it draws on actual payroll data, its correlation with the official NFP number is inconsistent. Large discrepancies between ADP and NFP are common, so traders treat it as a directional guide rather than a precise predictor.
Despite its limitations, a large surprise in the ADP number can cause significant short-term volatility in the U.S. Dollar (USD) as traders adjust their NFP expectations.
Trading the ADP Release
ADP is released at 8:15 AM ET. Traders use it to position ahead of NFP, but experienced traders are cautious about reading too much into the ADP number given its imperfect track record as an NFP predictor.
Related Terms
Non-Farm Payrolls (NFP)
A monthly U.S. labor market report measuring the number of jobs added or lost in the economy, excluding farm workers, government employees, and nonprofit staff. NFP is widely considered the most market-moving scheduled economic release in forex.
Unemployment Rate
The percentage of the labor force that is jobless and actively seeking employment. Released alongside Non-Farm Payrolls in the U.S., the unemployment rate is a lagging indicator that reflects overall economic health.
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