• ADP's latest report estimates the private sector added more than 800K jobs in December. 
• The dollar saw knee-jerk strength as traders tweak Friday's NFP forecasts.   

Employment in the US private sector rose by 807,000 in December, monthly data published by the Automatic Data Processing (ADP) Research Institute revealed on Wednesday, the largest such monthly employment gains since May 2021. That was well above median economist forecasts for a rise in employment of 400,000 and marked an acceleration in the pace of job gains versus November when 534,000 jobs were added. 

According to Nela Richardson, chief economist at ADP, “December’s job market strengthened as the fallout from the Delta variant faded and Omicron’s impact had yet to be seen”. “Job gains were broad-based, as goods producers added the strongest reading of the year, while service providers dominated growth," she said, adding that "December’s job growth brought the fourth quarter average to 625,000, surpassing the 514,000 average for the year". However, Richardson caveats, "while job gains eclipsed 6 million in 2021, private-sector payrolls are still nearly 4 million jobs short of pre-COVID-19 levels". 

Market Reaction

The US dollar saw knee-jerk strength following the data, with the DXY bouncing from around 96.05 to around 96.15, though still trades slightly lower on the day. The data adds upside risks to median economist forecasts for this week's official December non-farm payrolls number of 400K.