News out of Automatic Data Processing, Inc. (ADP) today appears to have shifted a large number of investors back towards safe-haven assets. While private sector job growth has been on the rise for the past 14 months, the data is expressing an ominous trend that is approaching contraction. Stoking the flames this week was also a report which cited a 47% increase from this time last year in impending job cuts.
Ahead of Friday’s Non-Farm Payroll (NFP) release, this employment data may spook investors away from riskier assets, which have been seen rising this week. Employment is an important sector of the economy and any signal that it is approaching contraction – if not already there – will only heighten tensions that the economy is approaching a double-dip recession.
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