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ADP +89K, Cutting Estimates in Half; Pre-Markets Up
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This morning, stepping away from the turmoil on Capitol Hill, the next report for Jobs Week has hit the tape. Yesterday was the JOLTS data for August doming in more robust than expected, but today is September private-sector payroll numbers from Automatic Data Processing (ADP - Free Report) , and they are much lower than expected: 89K, below the 150-160K estimates we were seeing before the release. It’s also almost exactly half the previous month’s upwardly revised 180K.
The stories we see emerging from this data at first blush are twofold: large companies shed -83K jobs last month, and those who changed jobs are no longer seeing double-digit pay increases for the first time in two years. For the first of these, small firms (fewer than 50 employees) grew by +95K job fills, and medium-sized businesses (50-499 employees) gained 72K. This entire year has had the narrative of weakness on the large-company side, and now they’ve turned negative. For those workers switching jobs, +9% wage growth is now the moving average. A year ago, this was 14-15%.
Leisure and Hospitality reclaimed the top spot, +92K, and it was a big drop to the next industries: Financials +17K and Construction +16K. Trade and Transportation lost -13K in September, while Professional/Business Services fell -32K. Yesterday’s JOLTS report showed over half a million job gains in Pro/Biz Services for August; it’s possible we’ve seen the last of those types of gaudy numbers for a while.
Also, according to Nela Richardson at ADP, as of her appearance on CNBC this morning, ADP numbers this year have come in hotter than the following nonfarm payrolls report from the U.S. Bureau of Labor Statistics (BLS) on Friday; we’ll see if this is the case in a couple days. Currently, expectations for Friday’s BLS number is 170K new jobs filled last month, though this number may come down a bit in light of today’s ADP report. That said, the two jobs reports rarely come in-line with one another right away — this usually takes a couple revisions to bring them closer.
Pre-market futures were up ahead of this news, and they’ve remained so, if a tad muted on the Dow side: +48 points on the blue-chip index, +13 on the S&P 500 and the Nasdaq has gone up from +64 points to +83 points. The 10-year bond yield, which jumped yesterday pretty much immediately upon the JOLTS release, has softened a tad to 4.75% at this hour; the 2-year remains at 5.10%. A narrower inverted yield curve, for sure, but at a rate that now takes seriously the Fed’s message of keeping interest rates higher for longer.
Image: Bigstock
ADP +89K, Cutting Estimates in Half; Pre-Markets Up
This morning, stepping away from the turmoil on Capitol Hill, the next report for Jobs Week has hit the tape. Yesterday was the JOLTS data for August doming in more robust than expected, but today is September private-sector payroll numbers from Automatic Data Processing (ADP - Free Report) , and they are much lower than expected: 89K, below the 150-160K estimates we were seeing before the release. It’s also almost exactly half the previous month’s upwardly revised 180K.
The stories we see emerging from this data at first blush are twofold: large companies shed -83K jobs last month, and those who changed jobs are no longer seeing double-digit pay increases for the first time in two years. For the first of these, small firms (fewer than 50 employees) grew by +95K job fills, and medium-sized businesses (50-499 employees) gained 72K. This entire year has had the narrative of weakness on the large-company side, and now they’ve turned negative. For those workers switching jobs, +9% wage growth is now the moving average. A year ago, this was 14-15%.
Leisure and Hospitality reclaimed the top spot, +92K, and it was a big drop to the next industries: Financials +17K and Construction +16K. Trade and Transportation lost -13K in September, while Professional/Business Services fell -32K. Yesterday’s JOLTS report showed over half a million job gains in Pro/Biz Services for August; it’s possible we’ve seen the last of those types of gaudy numbers for a while.
Also, according to Nela Richardson at ADP, as of her appearance on CNBC this morning, ADP numbers this year have come in hotter than the following nonfarm payrolls report from the U.S. Bureau of Labor Statistics (BLS) on Friday; we’ll see if this is the case in a couple days. Currently, expectations for Friday’s BLS number is 170K new jobs filled last month, though this number may come down a bit in light of today’s ADP report. That said, the two jobs reports rarely come in-line with one another right away — this usually takes a couple revisions to bring them closer.
Pre-market futures were up ahead of this news, and they’ve remained so, if a tad muted on the Dow side: +48 points on the blue-chip index, +13 on the S&P 500 and the Nasdaq has gone up from +64 points to +83 points. The 10-year bond yield, which jumped yesterday pretty much immediately upon the JOLTS release, has softened a tad to 4.75% at this hour; the 2-year remains at 5.10%. A narrower inverted yield curve, for sure, but at a rate that now takes seriously the Fed’s message of keeping interest rates higher for longer.
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