The “experts” expect that the Labor Department’s employment situation report on Friday, November 3, will show that the U.S. economy added 190,000 jobs in October. That would be a big drop from the 336,000 jobs added in September. But remember that these experts were projecting that the economy would add just 170,000 jobs before the September report.
Private payrolls rose by just 89,000 jobs in September, according to figures published today by the ADP Research Institute. That’s the fewest jobs added in a month since the start of 2021. Private payrolls climbed 180,000 in August. The results trailed all estimates in a Bloomberg survey of economists. The report is more evidence of a further slowing in the labor market. “We are seeing a steepening decline in jobs this month,” Nela Richardson, ADP’s chief economist, said in a statement. “Additionally, we are seeing a steady decline in wages in the past 12 months.” Both trends would be good news for the Federal Reserve in its fight to lower inflation. And would be positives for a financial market which has seen bond yields rise and stock prices stagnate recently in fears that inflation might be staging a come back. Good news–if, that is, the ADP numbers can be believed.
Earlier this week economists were projecting the official government jobs report due on Friday, that is tomorrow, would show that the U.S. economy added just 200,000 jobs in June. This morning, however, the ADP Research Institute’s survey of private employers showed the economy added 497,000 jobs in June. That’s more than twice the 220,000 gain that economists had projected for this report. And way above the 267,000 jobs reported by this survey in May.
The U.S. economy added a monster 339,000 jobs in May. Economists had been looking for 180,000 to 190,000 jobs. On the news, stocks rallied. Strongly. The Standard & Poor’s 500 closed up 1.45%. The Dow Jones Industrial Average ended the day 2.12% higher. The NASDAQ Composite added 1.07% and the NASDAQ 100 finished up 0.73%. The small-cap Russell 2000 moved higher by 3.56%. So why did stocks move up?
Nonfarm payrolls increased by 263,000 in November, the Labor Department said today. (And the October jobs total was revised upward to a gain of 284,000.) The unemployment rate held steady at 3.7%. Average hourly wages rose 0.6% in November from October. That was the biggest increase since January. Wages are now up 5.1% year-over-year. Economists surveyed by Bloomberg were looking for the economy to add 200,000 jobs in November and an unemployment rate of 3.7%. All of this shows a labor market that remains in top gear when the Federal Reserve has been looking for weakness in the jobs data as a sign that higher interest rates are slowing the economy enough to reach the Fed’s inflation rate goal.
The JOLTS survey from the Department of Labor showed a big jump in job openings in September. Which raised market worries that the Fed will raise interest rates tomorrow, November 2, by a hefty 75 basis points and signal that it is farther away from a pivot toward lowering interest rates than this recent rally has hoped. The Job Openings and Labor Turnover Survey showed that the number of available positions climbed to 10.7 million in September from a revised 10.3 million in August. Economists surveyed by Bloomberg were looking for a drop to 9.8 million openings.
The U.S. economy added 390,000 jobs in May, the Labor Department reported this morning. Economists had expected the economy to add 318.000 jobs for the month. In April the economy added a revised 436,000 jobs. The unemployment rate stayed steady at 3.6%. Economists had expected a drop to 3.5%.
The U.S. economy added 678,000 new jobs in February. That was the most new jobs since July. Economists surveyed by Bloomberg had expected the economy to add 423,000 jobs in the month. The official unemployment rate fell to 3.8%. Average hours earnings, however, lagged
The U.S. economy added 467,000 jobs in January. The official unemployment rate ticked up slightly to 4% from 3.9% in December, as more people moved off the sidelines to enter the labor market. Over the past 12 months, the United States has added nearly 7 million jobs.
Right now the stock and bond markets can’t decide if the Omicron Variant will crush the global economy badly enough to lead the Federal Reserve to delay its timetable for raising interest rates or if the U.S. economy is so strong and inflation so persistent that Jerome Powell and company will be pushed to accelerate the Fed’s tightening. Which makes Friday’s jobs report for November even more important than usual since it might provide the tipping data to send the Fed’s decision one way or the other. Right now economists at Argus forecast that the economy added 550,000 new jobs in November. That would be an increase from the 531,000 jobs created in October and from the 32,000 created in August.
New claims for unemployment in regular state programs well for the week ended October 30 to a seasonally adjusted 269,000.
On Friday, after the strong July jobs report, stocks said that the “re-opening” economy is going strong. That the Federal Reserve would see the July jobs report as a reason to raise interest rates. That inflation is likely to strengthen. On those conclusions the yield on the 10-year Treasury rose (7 basis points) to 1.30%. Bank stocks, which move up when interest rates do, climbed. “Re-opening” stocks such as Macy’s (M) gained with Macy’s shares up 6.24% on the day. Defensive stocks such as Chipotle (CMG), and PetMed Express (PETS) fell 0.68% and 0.82%, respectively. And tech stocks, the recent favorite sector when the economy looks shaky, fell with the NASDAQ 100 down 0.48%. What we’ll see next week if whether these convictions hold–and whether or not investors start to question Friday’s certainty.
