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Initial Jobless Claims Fall to Pandemic-Era Lowest Level
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It would seem we may finally be able to set aside the “importance” of meme stocks commanding market headlines, and not only because AMC (AMC - Free Report) is re-entering the earth’s atmosphere following its new share offering: we now have employment numbers from both weekly Jobless Claims and last month’s ADP (ADP - Free Report) private-sector payrolls. And what a nice set of numbers: ADP for May reached 978K, while Initial Jobless Claims fell to 385K — a pandemic low.
Let’s start with the very strong May ADP numbers, which were reported a day later than normal due to the Memorial Day holiday. The headline 978K is the highest gains we’ve seen in a year (when June 2020 saw a one-month gain of 4.35 million new jobs, filling in deep holes from early pandemic layoffs), and way up from the downwardly revised 654K from April. Thus far in 2021, ADP sees an average of 421K new private-sector jobs produced per month. Not too shabby.
Goods-producing jobs performed very well, with 128K new jobs last month, but Services really took off: 850K new private-sector placements last month is far higher than Friday’s nonfarm payroll estimate of 671K total new jobs. Not surprisingly, the Leisure & Hospitality space continues its very high rate of hiring, +440K on the month. Jobs-producing mainstays like Education/Health Services and Trade/Transportation/Utilities also did extremely well: 139K and 118K, respectively.
Initial Jobless Claims took out pandemic lows last week, by an even bigger margin than expected: 385K actual vs. 393K estimated. This compares favorably with the slight downward revision to the previous week’s 405K.
Continuing Claims, from a week in arrears, buoyed up to 3.77 million from the previous week’s downwardly revised 3.60 million. These are all strong figures, depicting a labor market that is unquestionably showing clear improvement.
Q1 Productivity was revised in-line with the previous take: 5.4% for the quarter. Expectations had been for a tick up, but coming off Q4’s -3.8%, nobody’s complaining about 9%+ productivity quarter over quarter.
Unit Labor Costs jumped to +1.7% in the quarter, swinging to a big positive from the expected -0.3%. Attracting Americans back into the workforce is clearly coming with a price tag. Still, this is the sort of growth many of us had been forecasting for Q1.
After the market opens this morning, more Services data will be released from Markit PMI and ISM. Expectations are for reads of 70.1 and 62.5%, respectively. Both are solid numbers. On the other hand, if the Services figures from PMI and ISM match those of Manufacturing data released earlier this week, we may see modest but notable improvements, which would obviously be a good thing, as well.
Markets had been giving back some of the nice gains recorded through the week so far, and the strong employment numbers only improved levels slightly. Ahead of the opening bell, the Dow looks to enter regular trading -170 points, the S&P 500 -25 and the Nasdaq -125. Even at these levels, however, we are still in the green for the week. And tomorrow morning we have the big Employment Situation report. Might we put up our first big week in the markets for at least six weeks?
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Initial Jobless Claims Fall to Pandemic-Era Lowest Level
It would seem we may finally be able to set aside the “importance” of meme stocks commanding market headlines, and not only because AMC (AMC - Free Report) is re-entering the earth’s atmosphere following its new share offering: we now have employment numbers from both weekly Jobless Claims and last month’s ADP (ADP - Free Report) private-sector payrolls. And what a nice set of numbers: ADP for May reached 978K, while Initial Jobless Claims fell to 385K — a pandemic low.
Let’s start with the very strong May ADP numbers, which were reported a day later than normal due to the Memorial Day holiday. The headline 978K is the highest gains we’ve seen in a year (when June 2020 saw a one-month gain of 4.35 million new jobs, filling in deep holes from early pandemic layoffs), and way up from the downwardly revised 654K from April. Thus far in 2021, ADP sees an average of 421K new private-sector jobs produced per month. Not too shabby.
Goods-producing jobs performed very well, with 128K new jobs last month, but Services really took off: 850K new private-sector placements last month is far higher than Friday’s nonfarm payroll estimate of 671K total new jobs. Not surprisingly, the Leisure & Hospitality space continues its very high rate of hiring, +440K on the month. Jobs-producing mainstays like Education/Health Services and Trade/Transportation/Utilities also did extremely well: 139K and 118K, respectively.
Initial Jobless Claims took out pandemic lows last week, by an even bigger margin than expected: 385K actual vs. 393K estimated. This compares favorably with the slight downward revision to the previous week’s 405K.
Continuing Claims, from a week in arrears, buoyed up to 3.77 million from the previous week’s downwardly revised 3.60 million. These are all strong figures, depicting a labor market that is unquestionably showing clear improvement.
Q1 Productivity was revised in-line with the previous take: 5.4% for the quarter. Expectations had been for a tick up, but coming off Q4’s -3.8%, nobody’s complaining about 9%+ productivity quarter over quarter.
Unit Labor Costs jumped to +1.7% in the quarter, swinging to a big positive from the expected -0.3%. Attracting Americans back into the workforce is clearly coming with a price tag. Still, this is the sort of growth many of us had been forecasting for Q1.
After the market opens this morning, more Services data will be released from Markit PMI and ISM. Expectations are for reads of 70.1 and 62.5%, respectively. Both are solid numbers. On the other hand, if the Services figures from PMI and ISM match those of Manufacturing data released earlier this week, we may see modest but notable improvements, which would obviously be a good thing, as well.
Markets had been giving back some of the nice gains recorded through the week so far, and the strong employment numbers only improved levels slightly. Ahead of the opening bell, the Dow looks to enter regular trading -170 points, the S&P 500 -25 and the Nasdaq -125. Even at these levels, however, we are still in the green for the week. And tomorrow morning we have the big Employment Situation report. Might we put up our first big week in the markets for at least six weeks?