ADP Was a Non-Event, But Keep Your Eyes on this Morning’s Non-Manu ISM Employment Index

It is unlikely that this morning’s ADP data (-203K), will lead to any substantial payroll revisions, despite what was a stellar ISM employment index.  I wanted to note that over the decades, as the US has shifted from a manufacturing to service oriented economy, the significance of the relationship between the manufacturing ISM’s employment index and payrolls has somewhat diminished.  However, if we see a similar jump in this morning’s non-manufacturing ISM employment index (10:00AM)  revisions could once again be on the table. Based on the data currently available my own projection for this month’s change in payrolls in -185K, however, I should note that payrolls have surprised to the upside of my forecast for 2 of the last 3 months.