ADP Report Shows Surprise Job Loss, Raising Concerns Ahead of NFP

The latest ADP National Employment Report delivered a negative surprise, showing a decline of 32,000 private-sector jobs in September, well below expectations for an increase of 52,000.

The report, compiled from payroll data of nearly 400,000 U.S. businesses, highlights further weakness in the labor market. It also marks a continuation of last month’s downbeat trend, when ADP recorded a smaller drop of 3,000 jobs.

The miss is particularly notable given ADP’s reputation as an early barometer of the government’s official nonfarm payrolls report, due Friday. Market participants now question whether the official figures will confirm the deterioration signaled by ADP.

A persistent decline in private employment suggests that the U.S. economy is encountering headwinds from slowing business activity, which could weigh on the U.S. dollar. Typically, job gains strengthen the dollar as they point to economic resilience, while job losses raise concerns over growth.

Despite the negative implications, traders remain cautious given ADP’s historical volatility compared with the government’s payrolls data. Still, the weak reading has already tempered bullish bets on the dollar and heightened speculation that the Federal Reserve may need to remain flexible in its approach to future interest rate cuts.