The ADP yesterday released the preliminary U.S. estimate of an average increase of 14,250 jobs per week in the four weeks ending on October 11, 2025.
That would put it around 57,000 jobs added in that four week period. The Dallas Fed early in Octber estimated that the breakeven rate now is around 30,000 jobs gain per month. 57,000 would be well above it.
Fed’s Waller, who’s one of the most dovish members at the moment including Bowman (and Miran), in his last speech in July said that the weekly ADP data was one of the reasons for him to support rate cuts.
More recently, he said “I’m still in the belief to cut rates, but we need to kind of be cautious about it. There’s a conflict right now between data showing solid growth in economic activity and data showing a softening labour market. Something’s gotta give. Either economic growth softens to match a soft labour market, or the labour market rebounds to match stronger growth. Since we don’t know which way the data will break on this conflict, we need to move with care when adjusting the policy rate to ensure we don’t make a mistake that will be costly to correct.”
If the ADP data is showing a strong rebound, then we could see Fed Chair Powell sounding more cautious in signalling another cut in December. This would be taken as a hawkish surprise and move the markets A LOT.
Given the absence of government data, we just have this ADP data and the US PMIs, which showed once again strong economic activity. Also, let’s not forget that the latest dot plot showed that the majority of FOMC members are neutral/hawkish and they easily dwarf the doves.
So, they would be the first to cast doubt on a December cut without strong reasons supporting it. Before yesterday, I thought the FOMC decision today would have been a non-event as the rate cut and the announcement of an end to QT were widely expected.
Now, I’m not so sure and it could actually turn into a very lively event.
This article was written by Giuseppe Dellamotta at investinglive.com.