Markets are bracing for the release of the ADP Employment Change report for August, due Thursday at 12:15 GMT. As the last major labor market indicator before the Federal Reserve’s crucial September 16–17 meeting, this report could significantly sway expectations around interest rate cuts.
Following July’s disappointing Nonfarm Payrolls (NFP) report—which led to a senior Labor Department official’s ouster and shook confidence in the US economy—August’s ADP numbers are under intense scrutiny. Market consensus expects 68,000 new private-sector jobs, down from 104,000 in July.
The data comes amid mounting pressure on the Fed from President Donald Trump to lower interest rates. “The unexpectedly weak job data seen in July boosted speculation about downside risks to the economy,” prompting the Fed to rethink its hawkish stance.
Fed Chair Jerome Powell recently acknowledged the limited inflationary impact of trade tariffs, suggesting a more dovish outlook. The CME Fed Watch Tool now shows a 90% probability of a 25 basis point cut this month.
A weak ADP reading could intensify calls for even deeper cuts, possibly 50 bps, and trigger fresh selling pressure on the US Dollar. Meanwhile, upbeat numbers may calm slowdown fears but likely won’t stop the Fed from easing, pending confirmation from Friday’s NFP report.
