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Headline ADP Payrolls Number Comes in Unexpectedly High
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This morning, following yesterday’s JOLTS report for March depicting the state of the domestic labor force, we see monthly private-sector payrolls from Automatic Data Processing (ADP - Free Report) for April. Results came in much stronger than expected — in fact, the 296K headline was more than double the 133K anticipated by analysts. It also was more than double the previous month’s downwardly revised 142K new private-sector jobs.
Goods-producing employment reached 67K for the month, a mere 23% of all jobs filled in the private sector. Services, at 229K, was far and away the biggest jobs producer. As per usual, the leading industry was Leisure & Hospitality, at a still-strong 154K, followed by Education/Health Care at 69K and Construction, 53K. In the loss ledger, we see Financial Services jobs shed -28K last month, and Manufacturing -38K.
Small (fewer than 50 employees) and medium-sized (50-499 workers) companies continued to do the heavy lifting in the private sector: 121K and 122K, respectively. Large firms — which are more likely to generate a news headline regarding reduced headcount, and we’ve seen them recently — only filled 47K new positions for the month. April’s tally was the highest overall we’ve seen since the 458K new jobs created in the month of July 2022.
These numbers don’t have much to do with Friday’s nonfarm payroll Employment Situation report from the U.S. Bureau of Labor Statistics (BLS), mostly because in real time the released figures lately have little to do with one another. Following a series of revisions on both ADP and BLS numbers, we usually get a more accurate picture on monthly labor. But we don’t need much explanation now to understand this morning’s results pretty much puts the final nail in the coffin for those hoping the Fed will not raise another 25 basis points on the Fed funds rate this afternoon.
Before the Fed meeting wraps today, we’ll also see April Services PMI from both the S&P and ISM, following the slightly improved Manufacturing data from both metrics earlier this week. S&P is expected to hold steady at 53.7, while ISM expects a rise to 51.8% from 51.2% reported a month ago. Both these reads are above the 50 inflection point between growth and loss. But even a sharp, unexpected downturn here likely would not be enough to keep the Fed from moving interest rates to a 5.00-5.25% range.
Thus far in early trading this morning, we’ve seen some relative volatility as all four major indices remain in the green. The Dow is barely above zero-balance in pre-market futures, while the small-cap Russell 2000 is making up some lost ground from recent trading days compared to the other indices. Both the Dow and Nasdaq are up roughly +25 points ahead of the opening bell, with the S&P and the Russell both up around +7 points.
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Headline ADP Payrolls Number Comes in Unexpectedly High
This morning, following yesterday’s JOLTS report for March depicting the state of the domestic labor force, we see monthly private-sector payrolls from Automatic Data Processing (ADP - Free Report) for April. Results came in much stronger than expected — in fact, the 296K headline was more than double the 133K anticipated by analysts. It also was more than double the previous month’s downwardly revised 142K new private-sector jobs.
Goods-producing employment reached 67K for the month, a mere 23% of all jobs filled in the private sector. Services, at 229K, was far and away the biggest jobs producer. As per usual, the leading industry was Leisure & Hospitality, at a still-strong 154K, followed by Education/Health Care at 69K and Construction, 53K. In the loss ledger, we see Financial Services jobs shed -28K last month, and Manufacturing -38K.
Small (fewer than 50 employees) and medium-sized (50-499 workers) companies continued to do the heavy lifting in the private sector: 121K and 122K, respectively. Large firms — which are more likely to generate a news headline regarding reduced headcount, and we’ve seen them recently — only filled 47K new positions for the month. April’s tally was the highest overall we’ve seen since the 458K new jobs created in the month of July 2022.
These numbers don’t have much to do with Friday’s nonfarm payroll Employment Situation report from the U.S. Bureau of Labor Statistics (BLS), mostly because in real time the released figures lately have little to do with one another. Following a series of revisions on both ADP and BLS numbers, we usually get a more accurate picture on monthly labor. But we don’t need much explanation now to understand this morning’s results pretty much puts the final nail in the coffin for those hoping the Fed will not raise another 25 basis points on the Fed funds rate this afternoon.
Before the Fed meeting wraps today, we’ll also see April Services PMI from both the S&P and ISM, following the slightly improved Manufacturing data from both metrics earlier this week. S&P is expected to hold steady at 53.7, while ISM expects a rise to 51.8% from 51.2% reported a month ago. Both these reads are above the 50 inflection point between growth and loss. But even a sharp, unexpected downturn here likely would not be enough to keep the Fed from moving interest rates to a 5.00-5.25% range.
Thus far in early trading this morning, we’ve seen some relative volatility as all four major indices remain in the green. The Dow is barely above zero-balance in pre-market futures, while the small-cap Russell 2000 is making up some lost ground from recent trading days compared to the other indices. Both the Dow and Nasdaq are up roughly +25 points ahead of the opening bell, with the S&P and the Russell both up around +7 points.