Post by
DZtrader on Sep 05, 2024 9:20am
Weak(er) ADP this morning
Bit of a good news bad news report out from ADP this morning. Private payrolls came in lighter than expected at just a hair under 100k, while initial unemployment claims actuall ticking down a bit. If you are looking for the good news portion of this report is that jobs are slowing but "overall" not yet losing, there were however three sectors showing small losses including ongoing manufacturing. This makes tomorrows jobs numbers very interesting. It is fair to say that ADP and the governments numbers have had their fair share of divergence over time, having said that the last report I believe was fairly close.
On another note, IF tomorrows numbers do come in well light of expectations, does this lock a 50 bip cut from the Fed? Truthfully, I don't know. They of course are now almost lazer focused on labor (versus inflation) as they have been for awhile. Guess it will depend on how much of a miss we see, if we do see a miss. Rapid declines will of course get attention faster than just about anything. While some will clamor for fast and heavy cuts, I am hopeful for a more slow and steady approach unless the data absolutely dictates otherwise, although we are a fair bit off the nuetral rate right now. That choppyness I have elluded to, may be getting ready to rear its head here. Good luck to all.
Comment by
Torontojay on Sep 05, 2024 11:39am
Adp jobs was the lowest level since 2021 and likely to be revised lower in the months ahead. This is the trend that's been going on for a long time now. It's never revised higher, only just lower. Keep in mind they overestimated non farms payroll by almost 70k per month for the last year! The beige book contains a wealth of information and it's not looking good out there.