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ADP Jobs +324K Still Higher than Expected; CVS, KHC, HUM Report
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Private-sector payrolls for July, as reported by Automatic Data Processing (ADP - Free Report) this morning, showed another surprise headline to the upside: +324K new private-sector jobs were filled last month, well ahead of the +175K expected. The previous month’s jaw-dropping +497K (more than double expectations) has now been reduced to a still-very-robust +455K. ADP Chief Economist Nela Richardson said, “The economy is doing better than expected… we continue to see a slowdown in pay growth without broad-based job loss.”
Unsurprisingly, the Leisure & Hospitality sector led the way once again, with +201K private-sector hires for the month. Goods-producing overall netted +21K, with mining and natural resources adding +48K new jobs, construction jobs +9K, augmented by -36K in private-sector manufacturing. This makes five months in a row manufacturers have shed jobs. While our headline number speaks to a robust labor force overall, this lower manufacturing trend points to an economic cooling.
We also see pay increases slowing to +6.2% last month, which is the lowest sub-headline registered since November of 2021. This was among employees staying at their jobs. Those in the workforce who have changed jobs have averaged +10% wage gains, still down from previous months. The +324K headline ADP number is the second-largest of the past year (June’s downwardly revised +455K leads), while January of 2023 brought in +119K, the cycle low. These numbers prep us for the big nonfarm payroll survey from the U.S. government on Friday morning.
CVS Health (CVS - Free Report) shares are down marginally in early trading on earnings and sales beats for Q2 out this morning: earnings of $2.21 per share beat the $2.12 expected (though below the $2.40 per share reported in the year-ago quarter) on $88.98 billion in revenues, which outperformed the Zacks consensus by +2.52%. This bottom-line includes a pre-tax restructuring charge of nearly half a billion dollars. Store closings and its working through the absorption of Aetna insurance via its pharmacy are ongoing issues. Shares are down -20% year to date, and another -0.20% in early trading. For more on CVS’ earnings, click here.
Kraft Heinz (KHC - Free Report) was mixed in its Q2 results out prior to the opening bell today, with earnings of 79 cents per share outpacing the Zacks consensus by a solid nickel (and ahead of the 70 cents per share reported a year ago), on revenues in the quarter of $6.72 billion, which was light estimates by -1.24%, even as the company raised prices of its goods. This Consumer Staples staple is another underperformer year to date: -12%; -1% in today’s pre-market. For more on KHC’s earnings, click here.
Health insurer Humana (HUM - Free Report) was also mixed in its Q2 results this morning, with earnings of $8.94 per share outperforming the $8.88 analysts had been looking for. Revenues of $25.73 billion missed expectations marginally, -0.34%. Full-year EPS guidance of $28.25 per share is pennies light of the Zacks consensus $28.28 per share. Yet the stock is climbing +6% in early trading hours, as businesses are reportedly stabilizing. Shares of HUM are also down year to date, though with today’s bid now negative single digits from the first of the year. For more on HUM’s earnings, click here.
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ADP Jobs +324K Still Higher than Expected; CVS, KHC, HUM Report
Private-sector payrolls for July, as reported by Automatic Data Processing (ADP - Free Report) this morning, showed another surprise headline to the upside: +324K new private-sector jobs were filled last month, well ahead of the +175K expected. The previous month’s jaw-dropping +497K (more than double expectations) has now been reduced to a still-very-robust +455K. ADP Chief Economist Nela Richardson said, “The economy is doing better than expected… we continue to see a slowdown in pay growth without broad-based job loss.”
Unsurprisingly, the Leisure & Hospitality sector led the way once again, with +201K private-sector hires for the month. Goods-producing overall netted +21K, with mining and natural resources adding +48K new jobs, construction jobs +9K, augmented by -36K in private-sector manufacturing. This makes five months in a row manufacturers have shed jobs. While our headline number speaks to a robust labor force overall, this lower manufacturing trend points to an economic cooling.
We also see pay increases slowing to +6.2% last month, which is the lowest sub-headline registered since November of 2021. This was among employees staying at their jobs. Those in the workforce who have changed jobs have averaged +10% wage gains, still down from previous months. The +324K headline ADP number is the second-largest of the past year (June’s downwardly revised +455K leads), while January of 2023 brought in +119K, the cycle low. These numbers prep us for the big nonfarm payroll survey from the U.S. government on Friday morning.
CVS Health (CVS - Free Report) shares are down marginally in early trading on earnings and sales beats for Q2 out this morning: earnings of $2.21 per share beat the $2.12 expected (though below the $2.40 per share reported in the year-ago quarter) on $88.98 billion in revenues, which outperformed the Zacks consensus by +2.52%. This bottom-line includes a pre-tax restructuring charge of nearly half a billion dollars. Store closings and its working through the absorption of Aetna insurance via its pharmacy are ongoing issues. Shares are down -20% year to date, and another -0.20% in early trading. For more on CVS’ earnings, click here.
Kraft Heinz (KHC - Free Report) was mixed in its Q2 results out prior to the opening bell today, with earnings of 79 cents per share outpacing the Zacks consensus by a solid nickel (and ahead of the 70 cents per share reported a year ago), on revenues in the quarter of $6.72 billion, which was light estimates by -1.24%, even as the company raised prices of its goods. This Consumer Staples staple is another underperformer year to date: -12%; -1% in today’s pre-market. For more on KHC’s earnings, click here.
Health insurer Humana (HUM - Free Report) was also mixed in its Q2 results this morning, with earnings of $8.94 per share outperforming the $8.88 analysts had been looking for. Revenues of $25.73 billion missed expectations marginally, -0.34%. Full-year EPS guidance of $28.25 per share is pennies light of the Zacks consensus $28.28 per share. Yet the stock is climbing +6% in early trading hours, as businesses are reportedly stabilizing. Shares of HUM are also down year to date, though with today’s bid now negative single digits from the first of the year. For more on HUM’s earnings, click here.
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