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ADP Jobs 534K, Better than Expected; Markets Up

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Wednesday, December 1, 2021

A very welcome private-sector monthly jobs report from Automatic Data Processing (ADP - Free Report) greets market participants this morning, with a better-than-expected 534K new private-sector jobs reportedly created for the month of November. This is down slightly from the slightly downwardly revised (but still excellent) 570K reported for October, but higher than the 506K consensus estimate.

In truth, any month that can register half a million jobs (6 million for a full year) is a good one for the U.S. labor market. Goods came in strong with 110K new positions filled in non-government sectors last month, while Services predictably did even better: 424K. Large companies (> 500 workers) flexed their health benefits, stock compensation and other advantages, hiring 277K employees in November, followed by 142K for medium-sized companies and 115K for small firms (< 50 workers).

Leisure & Hospitality, which is still working off the massive layoffs seen at both the early part of the pandemic and in subsequent waves of Covid-19 in travel-heavy regions of the country, easily led the way with 136K new jobs filled, Trade & Transportation rode the heavy seasonality ahead of holiday shopping at posted 78K new positions, and Education & Healthcare improved to 55K. Construction and Manufacturing performed very well in last month’s private sector, reporting 52K and 50K jobs filled last month, respectively.

We still have some ways to go before we’re back at pre-pandemic levels in overall U.S. employment, but these numbers certainly help. It’s now the third-straight month above 500K new private-sector jobs created, and the 11th straight month of overall job gains according to ADP. We will have to watch as the Omicron variant works its way throughout the globe how it might affect demand in goods and services, but this is likely at least a couple months away. As long as we see big chunks of unemployment done away with month over month, it will fuel the engine for economic growth.

After today’s opening bell, new figures from Markit Manufacturing PMI and ISM Manufacturing will give us another look at goods-producing sectors in the economy, also for November. We’ll also see a new Construction Spending report and the latest Beige Book this afternoon. There will also be a second day of testimony before a Senate committee today from Fed Chair Jay Powell and Treasury Secretary (and former Fed Chair) Janet Yellen; hopefully they will be able to salve current concerns about a hawkish end to asset tapering in the face of the Omicron threat.

Right now, markets are up big following two major downturns in the past three sessions: the Dow is +350 points at this hour, the S&P 500 is +60 and the Nasdaq is +230 points. Those record index highs are still a ways off with the big takedowns both yesterday and last Friday’s half-day of trading; it would appear the market is looking to establish some equilibrium.

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