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The first of this week’s consequential employment reports is out this Hump Day morning, with a new month being greeted by private-sector payrolls for January from Automatic Data Processing (ADP - Free Report) . A headline number of +106K new private-sector jobs were added last month, easily the lowest tally in the past year — the lowest, in fact, since the negative read posted way back in January 2021.
ADP estimates had been between 178-190K for the month, which themselves were well off the upwardly revised +253K pace we saw in December (then again, seasonal adjustments from holiday-season Retail and Warehousing hires ought to be considered here). Goods-producing jobs lost -3K for the month, while Services gained +109K.
Small-sized businesses (> 50 employees) really took it on the chin last month, shedding -75K positions, while large companies (< 500 employees) took in the lion’s share of new hires, +128K. Medium-sized firms made up the +64K difference. Leisure and Hospitality led the way again, at +95K new positions filled, followed distantly by Financial Services at +30K and Manufacturing +23K.
Significant winter storms likely contributed to the big misses in Trade/Transportation/Utilities at -41K for January, as well as Construction at -24K. This, again, can be counted as a seasonal development. As ADP Chief Economist Nela Richardson said today, despite weather issues in certain sectors, “For the month overall, the labor market showed strength.”
The Fed decides its new level of interest rates this afternoon; they have been very good about telegraphing their intentions, and today’s rate hike is likely to be 25 bps — the lowest rate hike since the Fed began raising back on St. Patrick’s Day last year. The four-session plateau of 75 bps hikes — from mid-June to early November 2022 — is now in the past; the question now is: how long will this “tail” of 25 bps hikes be?
The answers, or at least the seedlings of future Fed moves, will be sought from not only the Fed’s statement, out at 2pm this afternoon, and in the news conference Fed Chair Jay Powell gives directly following. In the past, Powell has been quick to throw cold water on any perceived exuberance about the end of hawkish Fed activity being in sight. We expect something along those same lines later today.
Likely because of this, pre-market futures are lower again this morning, selling some near-term profits from yesterday’s session that saw major indices grow between +1% (Dow) and +2.5% (Russell 2000). We also expect plenty of economic data after the opening bell but before the Fed statement, and we’ll wrap this afternoon with Q4 earnings reports from Meta (META - Free Report) , among others. In short, get strapped in for a memorable trading day.
Image: Bigstock
ADP Jobs Dwindle on Weather Issues: 106K
Wednesday, February 1st, 2023
The first of this week’s consequential employment reports is out this Hump Day morning, with a new month being greeted by private-sector payrolls for January from Automatic Data Processing (ADP - Free Report) . A headline number of +106K new private-sector jobs were added last month, easily the lowest tally in the past year — the lowest, in fact, since the negative read posted way back in January 2021.
ADP estimates had been between 178-190K for the month, which themselves were well off the upwardly revised +253K pace we saw in December (then again, seasonal adjustments from holiday-season Retail and Warehousing hires ought to be considered here). Goods-producing jobs lost -3K for the month, while Services gained +109K.
Small-sized businesses (> 50 employees) really took it on the chin last month, shedding -75K positions, while large companies (< 500 employees) took in the lion’s share of new hires, +128K. Medium-sized firms made up the +64K difference. Leisure and Hospitality led the way again, at +95K new positions filled, followed distantly by Financial Services at +30K and Manufacturing +23K.
Significant winter storms likely contributed to the big misses in Trade/Transportation/Utilities at -41K for January, as well as Construction at -24K. This, again, can be counted as a seasonal development. As ADP Chief Economist Nela Richardson said today, despite weather issues in certain sectors, “For the month overall, the labor market showed strength.”
The Fed decides its new level of interest rates this afternoon; they have been very good about telegraphing their intentions, and today’s rate hike is likely to be 25 bps — the lowest rate hike since the Fed began raising back on St. Patrick’s Day last year. The four-session plateau of 75 bps hikes — from mid-June to early November 2022 — is now in the past; the question now is: how long will this “tail” of 25 bps hikes be?
The answers, or at least the seedlings of future Fed moves, will be sought from not only the Fed’s statement, out at 2pm this afternoon, and in the news conference Fed Chair Jay Powell gives directly following. In the past, Powell has been quick to throw cold water on any perceived exuberance about the end of hawkish Fed activity being in sight. We expect something along those same lines later today.
Likely because of this, pre-market futures are lower again this morning, selling some near-term profits from yesterday’s session that saw major indices grow between +1% (Dow) and +2.5% (Russell 2000). We also expect plenty of economic data after the opening bell but before the Fed statement, and we’ll wrap this afternoon with Q4 earnings reports from Meta (META - Free Report) , among others. In short, get strapped in for a memorable trading day.
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