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On 2-2-22, also Groundhog Day, employment analysts had been expecting another 2: 200K new jobs created for the month of January. However, it was not to be: a loss of -301K private-sector positions — a swing from expectations of half a million jobs — from Automatic Data Processing (ADP - Free Report) , the first negative number on ADP headline since December 2020, and the biggest monthly loss since April 2020.
Both Goods (-27K) and Services (-274K) took heavy losses last month, most certainly due to the Omicron variant of the Covid-19 pandemic sending workers home, many of which counting as job losses for the month. Leisure & Hospitality, the main driver of job gains over the past year-plus, dropped -154K positions, followed by -62K in Trade/Transportation/Utilities and -21K in Manufacturing. By size of company, small firms (fewer than 50 employees) lost the most: -144K jobs, followed by large companies (more than 500 workers) with -98K.
A couple of things about these numbers: first, ADP headlines have been vastly revised over the course of the next two months, as full-month data is likely not complete at the time of the initial announcement, as today’s number was. So we should expect revisions. (The question is: revised which way?) Second, because the Omicron variant has largely ebbed over the past couple weeks since the January ADP survey, we expect private-sector jobs to bounce back in February and/or March. We’ll expect today’s report to be a blip on the screen.
Of course, if these jobs numbers are the result of something longer-lasting, then that is a different issue. However, should we be seeing a drastic slowdown in employment for some as-yet-unforeseen reason, we can cancel talk that the Fed is going to raise interest rates four or five times this year. The next FOMC meeting is in mid-March; by that point, we should see either jobs bounce back or the Fed rethinking their interest rate hike policy.
As such, pre-market futures did not budge much upon this morning’s ADP report. The Dow came down a tad, now +20 points to start a new session, with the S&P 500 +30 and the Nasdaq +175 points. All three major indexes are up notably over the past three sessions, though still a ways out from sniffing distance of their all-time closing highs.
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Disappointing Private Payrolls Data for January
On 2-2-22, also Groundhog Day, employment analysts had been expecting another 2: 200K new jobs created for the month of January. However, it was not to be: a loss of -301K private-sector positions — a swing from expectations of half a million jobs — from Automatic Data Processing (ADP - Free Report) , the first negative number on ADP headline since December 2020, and the biggest monthly loss since April 2020.
Both Goods (-27K) and Services (-274K) took heavy losses last month, most certainly due to the Omicron variant of the Covid-19 pandemic sending workers home, many of which counting as job losses for the month. Leisure & Hospitality, the main driver of job gains over the past year-plus, dropped -154K positions, followed by -62K in Trade/Transportation/Utilities and -21K in Manufacturing. By size of company, small firms (fewer than 50 employees) lost the most: -144K jobs, followed by large companies (more than 500 workers) with -98K.
A couple of things about these numbers: first, ADP headlines have been vastly revised over the course of the next two months, as full-month data is likely not complete at the time of the initial announcement, as today’s number was. So we should expect revisions. (The question is: revised which way?) Second, because the Omicron variant has largely ebbed over the past couple weeks since the January ADP survey, we expect private-sector jobs to bounce back in February and/or March. We’ll expect today’s report to be a blip on the screen.
Of course, if these jobs numbers are the result of something longer-lasting, then that is a different issue. However, should we be seeing a drastic slowdown in employment for some as-yet-unforeseen reason, we can cancel talk that the Fed is going to raise interest rates four or five times this year. The next FOMC meeting is in mid-March; by that point, we should see either jobs bounce back or the Fed rethinking their interest rate hike policy.
As such, pre-market futures did not budge much upon this morning’s ADP report. The Dow came down a tad, now +20 points to start a new session, with the S&P 500 +30 and the Nasdaq +175 points. All three major indexes are up notably over the past three sessions, though still a ways out from sniffing distance of their all-time closing highs.