EUR/USD: expectations regarding the NFP report

The highlight of Wednesday's economic report releases was the ADP National Employment Report for last month. It showed that total U.S. non-farm payroll employment in the non-farm private sector declined by 2.76 million - much better than the 8.5 million decline that was expected by analysts.

As always, traders are using the ADP private sector data to prepare for Friday's NFP publication. Since ADP is published monthly just two days before the NFP, it often gives a rough idea of the upcoming NFP figure.

Last month's ADP report

ADP is a measure of private employment derived from anonymous wage data from client firms served by ADP.

Last month, the virus situation continued to threaten companies. However, compared to the beginning of March, when small businesses were the most affected, this month it is large companies that suffer the biggest decline in the employment rankings.

Another interesting development this month in the private sector is the comparison between the goods-producing (manufacturing) and service-providing sectors. The latter is responsible for more than double the job losses (1.898 versus 0.789), indicating the difficulties facing the service sector in the United States.

Trade, transportation and utilities lead to job losses in the service sector, followed closely by information and financial activities. In the goods-producing sector, manufacturing and natural resources are at the top of the list.

Despite the gloomy figures, the forecast for the release was much worse. Since they were better than the initial forecasts, we can hope that April marked a low point for private sector businesses, and that job losses probably peaked that month.

As many states have gradually begun to reopen businesses, we could see a similar rebound in the Friday NFP figures.