ADP Data in Focus – Why Next Week’s Report Could Be the Most Important of the Year

The upcoming ADP employment report could turn out to be the most important release of the year. The reason lies in the recent revisions to the Nonfarm Payrolls (NFP) data, which prompted market participants to reassess the reliability of ADP figures.

Historically, the ADP and NFP reports have often diverged, leaving traders exposed. Time and again, the market reacted to the ADP data only to be caught off guard by the NFP a few days later. A recent example came in July: ADP reported a loss of 33K jobs, while the NFP showed a surprising gain of 147K (vs. +110K expected).

However, after the latest revisions to the NFP series, it appears that ADP was actually capturing the real trend in private payrolls more accurately. Especially since late 2024, ADP reflected both the uptrend in hiring during Q4 and the subsequent downturn in 2025, driven by tariff-related uncertainty and growth concerns.

Now, that trend may be set to reverse. With the tariff headwinds behind us and expectations of Fed rate cuts rising, business activity could pick up again – something that ADP might be the first to signal.

Fed’s Waller Highlights ADP Data

Adding to the importance, Fed Governor Christopher Waller recently referenced ADP in his speech. He explained that the Fed uses its own estimates of weekly payroll employment, built in collaboration with ADP, covering roughly 20% of the U.S. private workforce. According to Waller, the ADP-based measure has shown a similar contour to the official statistics, but importantly, it has continued to point to further deterioration beyond the July NFP reference period.

Bottom Line

The ADP report has gained significant credibility in light of recent developments and Fed commentary. Next week’s release could spark major market moves – not just in the U.S. dollar, but across equities, bonds, and gold. Traders should prepare for heightened volatility, especially with the NFP report landing just one day later.

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