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Pre-market futures had buoyed up earlier this morning, but have been on a slow drift downward since private-sector payrolls from Automatic Data Processing (ADP - Free Report) were released an hour before the open. The thing is, the results were good — much better than expected, and a world away from what we saw a month ago. But the Dow has slipped from around +190 points to +120 now, the Nasdaq +75 points earlier to +20 at this hour, and the S&P 500 went from +25 points to +10.
Meanwhile, February ADP numbers came up big, with a headline of +475K — ahead of the consensus estimate +400K, which would have already illustrated a strong month for the labor market. But the revision to January’s initially very disappointing -301K was the real eye-opener: +509K private-sector job gains represents a correction of +810K in a month’s time. It would appear the Omicron effect was more difficult for records-keepers to get their arms around in real time.
The Services sector almost always brings the lion’s share of new jobs, but last month this was particularly pronounced: +417K versus +57K in Goods-producing jobs. Small firms (less than 50 employees) actually lost -96K positions in February; it was large corporations (more than 500 employees) that more than made up for the loss: +552K new private-sector jobs created for the month. The ability to pay higher wages and offer better health and retirement benefits looks to really be playing a factor in last month’s labor scenario.
Leisure & Hospitality jobs came in at +170K, resuming its post-Covid growth trajectory following the Omicron blip. Trade/Transportation/Utilities brought +98K, also pointing to a post-Omicron reboot. Professional/Business Services created a strong +72K new jobs in the private sector — in any “normal” month, this growth would have been the main story. Education/Healthcare tallied +40K and Manufacturing was +30K.
Current expectations for Friday’s non-farm payrolls from the U.S. Bureau of Labor Statistics (BLS) are for +440K new jobs filled last month, with the Unemployment Rate expected to tick down to 3.9%. While still strong, this would amount to a tapering off of monthly jobs totals, compared to the 700K+ we were seeing per month in February and March of last year (the “Great Reopening”). But the past year of averaging around a half-million new jobs per month is extraordinary, and it can’t last forever.
Perhaps the real reason pre-markets are carrying slighter gains into Wednesday’s opening bell is because of oil prices continuing to spiral higher — at one point topping $112 per barrel, which is the highest read we’ve seen since 2011. New Russian assaults within Ukraine promises the war will not be over soon, which will keep oil prices elevated as the rest of the world cuts trade with the aggressor nation. It’s still the elephant in the room, even if surprises in jobs numbers double from current levels.
Image: Bigstock
ADP Brings +475K Jobs; Revision Jumps +810K
Wednesday, March 2, 2022
Pre-market futures had buoyed up earlier this morning, but have been on a slow drift downward since private-sector payrolls from Automatic Data Processing (ADP - Free Report) were released an hour before the open. The thing is, the results were good — much better than expected, and a world away from what we saw a month ago. But the Dow has slipped from around +190 points to +120 now, the Nasdaq +75 points earlier to +20 at this hour, and the S&P 500 went from +25 points to +10.
Meanwhile, February ADP numbers came up big, with a headline of +475K — ahead of the consensus estimate +400K, which would have already illustrated a strong month for the labor market. But the revision to January’s initially very disappointing -301K was the real eye-opener: +509K private-sector job gains represents a correction of +810K in a month’s time. It would appear the Omicron effect was more difficult for records-keepers to get their arms around in real time.
The Services sector almost always brings the lion’s share of new jobs, but last month this was particularly pronounced: +417K versus +57K in Goods-producing jobs. Small firms (less than 50 employees) actually lost -96K positions in February; it was large corporations (more than 500 employees) that more than made up for the loss: +552K new private-sector jobs created for the month. The ability to pay higher wages and offer better health and retirement benefits looks to really be playing a factor in last month’s labor scenario.
Leisure & Hospitality jobs came in at +170K, resuming its post-Covid growth trajectory following the Omicron blip. Trade/Transportation/Utilities brought +98K, also pointing to a post-Omicron reboot. Professional/Business Services created a strong +72K new jobs in the private sector — in any “normal” month, this growth would have been the main story. Education/Healthcare tallied +40K and Manufacturing was +30K.
Current expectations for Friday’s non-farm payrolls from the U.S. Bureau of Labor Statistics (BLS) are for +440K new jobs filled last month, with the Unemployment Rate expected to tick down to 3.9%. While still strong, this would amount to a tapering off of monthly jobs totals, compared to the 700K+ we were seeing per month in February and March of last year (the “Great Reopening”). But the past year of averaging around a half-million new jobs per month is extraordinary, and it can’t last forever.
Perhaps the real reason pre-markets are carrying slighter gains into Wednesday’s opening bell is because of oil prices continuing to spiral higher — at one point topping $112 per barrel, which is the highest read we’ve seen since 2011. New Russian assaults within Ukraine promises the war will not be over soon, which will keep oil prices elevated as the rest of the world cuts trade with the aggressor nation. It’s still the elephant in the room, even if surprises in jobs numbers double from current levels.
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