Based on another disappointing employment data, ADP, it appears that we may have been too optimistic regarding tomorrow's official US employment report. However, we will stick with our original total NFP net change of 152K as we believe there was actually some net hiring in the government sector in May. Initial jobless claims was disappointing again. Q1 GDP was in-line with our estimate, but below the Street's and lower than the official advance estimate.
ADP
ADP employment report for May showed an increase of 133K in jobs within the non-farm private sectors. This was significantly below the 150K consensus. Hiring in small, medium, and large non-farm private businesses increased by 67K, 57K, and 9K, respectively, from the previous month.
Initial Jobless Claims
Seasonally-adjusted initial claims came in at 383K, up 10K from another upwardly revised prior week's figure, and higher than the 370K consensus. The upward revision trend continues and is getting stronger. We note that this figure likely was not included in nor did it impact tomorrow's employment report.
Q1 GDP
The Q1 GDP print of 1.9% was in-line with our estimate, but below last month's official advance estimate of 2.2% and the Street's 2.0%. On the bright side, the tiny annualized growth was driven mainly by consumption and increase in exports.
Overall, this morning's economic figures were disappointing. However, it appears that for the time being, the market is still hoping for better employment and ISM numbers tomorrow, as S&P 500 futures remain in the black. Again, our ISM and NFP estimates for tomorrow are 54.5 and 152K, respectively.
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