ADP name comes from the Automatic Data Processing company the logo is the one that you are seeing in the recording that comes with this subchapter. ADP provides payroll services to US corporations and the way they do that is by analyzing data from about 400,000 customers to derive growth forecasts, according to forexfactory.com
The ADP non-farm employment change is first tier indicator, and this is the first clue traders have regarding the NFP number to be released two days later.
It is released in the first week of each month, on a Wednesday, two days before the actual NFP and unemployment rate to hit the market, and volatility is high surrounding the release of the ADP. It represents the estimated change in the number of employed people during the previous month, excluding the farming industry and government. This data provides an early look at employment growth two days ahead of the government released data.
Any jobs related data is important to traders all over the world since job creation is the very foundation an economy that wants to grow it is basing on.
The most important things to keep in mind regarding the ADP Non-Farm Employment change indicator:
- release date: on a monthly basis, two days after the month ends;
- just before the NFP;
- release time: Wednesday, in the NFP week, at 12:15 GMT, during North American session;
- first tier data as it offers a glimpse into the NFP number;
- brings higher levels of volatility.