ADP report was stronger than expected - ANZ

Analysts at ANZ noted that the January ADP report was stronger than expected, at 235k, implying robust private sector jobs growth.

Key Quotes:

"It may lead to upward tweaks to expectations for the upcoming non-farm payrolls report (currently 180k).  Additionally, the Q4 Employment Cost Index was in line with expectations, rising 0.6% q/q vs 0.7% q/q in Q3. However, total compensation including wages and benefits rose 2.6% y/y vs 2.2% y/y 12 months ago.

That is the highest annual growth since Q1 2015. Finally, the Chicago PMI dipped in January (65.7 vs 67.8 in December), but was still better than expected. The dip echoes the drop in other regional activity readings for January and may well have been influenced by inclement weather conditions."