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Jobs Week gets underway in earnest this morning, with results for February private-sector payrolls from Automatic Data Processing (ADP - Free Report) out more than an hour before the opening bell. A headline number of +140K is below consensus expectations of +150K, but still +29K month over month, from the upwardly revised +111K in January. Goods-producing jobs made up +30K of the positions filled last month, with the Services sector making up +110K.
In terms of company size and February private-sector (non-government) jobs, small firms (fewer than 50 employees) only brought in 19K new workers — this segment had previously taken up a much larger slice of the overall private-sector employment pie. By contrast, large corporations (over 500 employees) filled 61K positions last month, while medium-sized companies took away the most: 69K for the month. Leisure & Hospitality once again led the way, with +41K, Construction +28K and Trade/Transportation/Utilities +24K following.
Those who stayed in their jobs last month received an average raise of +5.1% year over year, while those who switched employment destinations saw their wages rise +7.6%, which was higher than expected. While workers paid by the hour rose last month, while overall hours worked went down.
This seems to suggest a rise in part-time work — or employment that does not receive healthcare perks, stock options, etc. Thus, we are seeing a lag in “real” earnings, which are lower, even though wages are higher. And this means the labor market may not be as robust as the headline numbers make it out to be.
Pre-market futures were well onboard with these results, however: the Dow is +175 points, while the S&P 500 is +30. The Nasdaq, at +170 points at this hour, leads the way in terms of percentage. This is before Fed Chair Jerome Powell makes his appearance this morning before the U.S. House Financial Committee, although his statement has already been released to the press:
Powell said monetary policy rates are likely at their peak (5.25-5.50% since July of last year), and the Fed expects to be pulling back on rates “sometime this year.” He also said there are risks to cutting too soon (see the hyper-inflation that hit the market in the early 1980s) as well as cutting too late (which would make current rates far too severe in a rapidly cooling economy). The next meeting of the Federal Open Market Committee concludes two weeks from this afternoon.
Aside from Powell on Capitol Hill today at 10am ET, we’ll also see Wholesale Inventories and JOLTS jobs data, both for January, as well as the second of eight total Beige Books from the Fed in 2024, which is due at 2pm ET. This is a regional survey of economic growth/contraction among 12 Federal Reserve districts. We will also hear from San Francisco Fed President Mary Daly and Minneapolis Fed President Neel Kashkari later today, after the opening bell. Questions or comments about this article and/or author? Click here>>
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ADP Jobs +140K, but Part-Time Work Is Rising
Wednesday, March 6th, 2024
Jobs Week gets underway in earnest this morning, with results for February private-sector payrolls from Automatic Data Processing (ADP - Free Report) out more than an hour before the opening bell. A headline number of +140K is below consensus expectations of +150K, but still +29K month over month, from the upwardly revised +111K in January. Goods-producing jobs made up +30K of the positions filled last month, with the Services sector making up +110K.
In terms of company size and February private-sector (non-government) jobs, small firms (fewer than 50 employees) only brought in 19K new workers — this segment had previously taken up a much larger slice of the overall private-sector employment pie. By contrast, large corporations (over 500 employees) filled 61K positions last month, while medium-sized companies took away the most: 69K for the month. Leisure & Hospitality once again led the way, with +41K, Construction +28K and Trade/Transportation/Utilities +24K following.
Those who stayed in their jobs last month received an average raise of +5.1% year over year, while those who switched employment destinations saw their wages rise +7.6%, which was higher than expected. While workers paid by the hour rose last month, while overall hours worked went down.
This seems to suggest a rise in part-time work — or employment that does not receive healthcare perks, stock options, etc. Thus, we are seeing a lag in “real” earnings, which are lower, even though wages are higher. And this means the labor market may not be as robust as the headline numbers make it out to be.
Pre-market futures were well onboard with these results, however: the Dow is +175 points, while the S&P 500 is +30. The Nasdaq, at +170 points at this hour, leads the way in terms of percentage. This is before Fed Chair Jerome Powell makes his appearance this morning before the U.S. House Financial Committee, although his statement has already been released to the press:
Powell said monetary policy rates are likely at their peak (5.25-5.50% since July of last year), and the Fed expects to be pulling back on rates “sometime this year.” He also said there are risks to cutting too soon (see the hyper-inflation that hit the market in the early 1980s) as well as cutting too late (which would make current rates far too severe in a rapidly cooling economy). The next meeting of the Federal Open Market Committee concludes two weeks from this afternoon.
Aside from Powell on Capitol Hill today at 10am ET, we’ll also see Wholesale Inventories and JOLTS jobs data, both for January, as well as the second of eight total Beige Books from the Fed in 2024, which is due at 2pm ET. This is a regional survey of economic growth/contraction among 12 Federal Reserve districts. We will also hear from San Francisco Fed President Mary Daly and Minneapolis Fed President Neel Kashkari later today, after the opening bell.
Questions or comments about this article and/or author? Click here>>