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We reach Jobs Week a tad early this month, likely due to next week’s Labor Day-shortened series of trading days, and it begins with this morning’s private-sector payroll results from Automatic Data Processing ((ADP - Free Report) for August, which registered +177K new private-sector jobs for the month. The previous month’s surprisingly high +324K has been ratcheted up this morning to +371K. Thus, today’s headline for the current month is less than half the previous month.
Actually, this is the second report out for Jobs Week, following yesterday’s Job Openings and Labor Turnover Survey (JOLTS), which also showed a notable cool-down in new hirings. For this ADP set of numbers, small businesses (<50 employees) are cooling off to +18K new private-sector jobs filled this month, while large firms (>500 employees) put up the most, at +83K (and reversing the decline in recent months). Medium-sized companies created +79K positions.
Education/Healthcare led the way with +52K new jobs filled (seasonally “back to school”), followed by Trade/Transportation/Utilities at +45K. Leisure & Hospitality, which had spent most of the past couple years leading all industries in jobs growth, generated +30K new private-sector jobs. ADP’s Chief Economist Nela Richardson called the results as having moved from “exceptional to sustainable.” This is good news for those looking for jobs figures to create less of a headwind for bringing down inflation. Those who have changed jobs in the past month are registering the lowest wage increases in two years.
The first revision on Q2 GDP came down 30 basis points (bps) to a headline of +2.1%. Consumption ticked up to +1.7% from the previous month’s +1.6%, while the price index came in at +2.0% — the lowest since the negative headline back in Q2 of 2020. Core price index came in at +3.7% for the quarter, down 50 bps from the previous print. This is more evidence that we’re seeing a cooling economy, and although the full Personal Consumption Expenditure (PCE) report is not due out til tomorrow morning, the Fed is likely taking note of this cool-down, as well.
Advance Retail Inventories for July came in at +0.3%, less than half the previous month’s +0.7%, while Advance Wholesale Inventories was negative: -0.1% compared to the +0.5% registered for June. And our Advance Trade Balance in Goods for July sank to -$91.2 billion, the deepest deficit since April on this year. Still more incremental data that the economy is slowing down, and ultimately more good news for potential interest rates.
Color the pre-market indices impressed: before this cavalcade of data, the Dow was +25 points, the Nasdaq -2 points and the S&P 500 +1, at this moment we’re seeing these figures at +48 points, +31 and +6 points, respectively. After the open we’ll see results for Pending Home Sales, and Salesforce ((CRM - Free Report) reports quarterly results after today’s closing bell.
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Private Payrolls Increased Less Than Expected
We reach Jobs Week a tad early this month, likely due to next week’s Labor Day-shortened series of trading days, and it begins with this morning’s private-sector payroll results from Automatic Data Processing ((ADP - Free Report) for August, which registered +177K new private-sector jobs for the month. The previous month’s surprisingly high +324K has been ratcheted up this morning to +371K. Thus, today’s headline for the current month is less than half the previous month.
Actually, this is the second report out for Jobs Week, following yesterday’s Job Openings and Labor Turnover Survey (JOLTS), which also showed a notable cool-down in new hirings. For this ADP set of numbers, small businesses (<50 employees) are cooling off to +18K new private-sector jobs filled this month, while large firms (>500 employees) put up the most, at +83K (and reversing the decline in recent months). Medium-sized companies created +79K positions.
Education/Healthcare led the way with +52K new jobs filled (seasonally “back to school”), followed by Trade/Transportation/Utilities at +45K. Leisure & Hospitality, which had spent most of the past couple years leading all industries in jobs growth, generated +30K new private-sector jobs. ADP’s Chief Economist Nela Richardson called the results as having moved from “exceptional to sustainable.” This is good news for those looking for jobs figures to create less of a headwind for bringing down inflation. Those who have changed jobs in the past month are registering the lowest wage increases in two years.
The first revision on Q2 GDP came down 30 basis points (bps) to a headline of +2.1%. Consumption ticked up to +1.7% from the previous month’s +1.6%, while the price index came in at +2.0% — the lowest since the negative headline back in Q2 of 2020. Core price index came in at +3.7% for the quarter, down 50 bps from the previous print. This is more evidence that we’re seeing a cooling economy, and although the full Personal Consumption Expenditure (PCE) report is not due out til tomorrow morning, the Fed is likely taking note of this cool-down, as well.
Advance Retail Inventories for July came in at +0.3%, less than half the previous month’s +0.7%, while Advance Wholesale Inventories was negative: -0.1% compared to the +0.5% registered for June. And our Advance Trade Balance in Goods for July sank to -$91.2 billion, the deepest deficit since April on this year. Still more incremental data that the economy is slowing down, and ultimately more good news for potential interest rates.
Color the pre-market indices impressed: before this cavalcade of data, the Dow was +25 points, the Nasdaq -2 points and the S&P 500 +1, at this moment we’re seeing these figures at +48 points, +31 and +6 points, respectively. After the open we’ll see results for Pending Home Sales, and Salesforce ((CRM - Free Report) reports quarterly results after today’s closing bell.