ADP National Employment Report Shows Jobs Increase, Dollar Leaps Upwards

The latest ADP employment report for August has revealed that there were 177,000 more jobs in the United States’ economy, the data that was produced in conjunction with Moody’s Analytics was in line with market expectations, which anticipated an increase of 175,000 positions.

The dollar has reacted positively to the update, as the GBP/USD rate has fallen favourably for the greenback, as the pound is buying $1.310, climbing down from $1.316, the employment data continues the optimism about the United States economic position, as yesterday the Bureau of Labor Statistics released average expenditure for 2015, which was $55,978, a 4.6 percent increase from 2014 levels.

Against the euro, the dollar also appreciated, as EUR/USD fell from the euro buying $1.115 to $1.113, persisting the pattern of the past 24 hours, as yesterday the euro peaked at buying $1.119.

ADP’s report concluded that service providing employment was the main driver for the figures, as the sector created a further 183,000 openings in the job market, although this was fewer than the 199,000 total for July.

Professional and business services followed with 53,000 more opportunities, down from the 70,000 that was posted last month, while the trade, transportation and utilities sector increased by 26,000 jobs in August, 5,000 fewer that what was added in July, there were more increases found in financial activities, which added 15,000 jobs, a rise compared to last month’s gain of 13,000 jobs.

Countering those rises, goods producing employers were not taking on more staff as the volume of jobs reduced by 6,000, higher than July where the losses were 5,000, the construction industry lost 2,000 jobs, following July losses of 5,000 jobs, there was also disappointment for the manufacturing sector, as the jobs market was flat in August, after gaining 5,000 more positions last month.

Mark Zandi, chief economist of Moody’s Analytics, said, “The American job machine continues to hum along. Job creation remains strong, with most industries and companies of all sizes adding solidly to their payrolls. The U.S. economy will soon be at full employment.”

The data lends more weight to the argument for a rate rise next month, which was hinted at last Friday in Federal Chair Janet Yellen’s annual speech at Jackson Hole in Wyoming.

Canada Suffers 0.4% Decrease in Second Quarter Growth 

As widely expected, Statistics Canada has disclosed that growth in Canada for the second quarter slumped by 0.4%, after increasing by 0.6% in the first three months of the year, representing the largest decline in quarterly GDP since the second quarter in 2009, amid the aftermath of the financial crises.

The impact of the large decline in crude petroleum output, and the damaging wildfire at Fort McMurray in the state of Alberta, real GDP actually grew by 0.1%, the Bank of Canada estimated that the wildfires slashed a huge 1.1 percentage points from second quarter GDP, additionally a 4.5% reduction in exports also largely contributed to the fall in GDP, particularly as overseas sales rose by 1.9% in the first quarter.

Canadian balance of trade was not helped by an 0.3% rise in imports, a slender fall of 0.1% from the first quarter, although domestic demand rose by 0.5%, as household final consumption expenditure continued to rise, up 0.5%, all but matching the pace of  the previous four quarters, the Canadian economy has grown in the previous three quarters, and is expected to rebound in the nest quarter.

The USD/CAD rate has escalated since today’s data has been announced, with the dollar now buying CAD 1.312, from beginning the day’s trading under CAD 1.31.