ADP JANUARY Jobs Report: 291,000 JOBS CREATED In The Private Sector

catkinZ8a

DOW UP @ 29,199

S & P UP @ 3,325

NASDAQ UP @ 9,483


ADP Reports 291,000 Private-Sector Jobs Were Created in January

Feb. 5, 2020 10:07 am ET


Private hiring surged in January, giving investors reason to believe Friday’s nonfarm payroll number from the Labor Department will be solid.


Payroll processor ADP said nongovernment payrolls rose 291,000 last month, up from a revised 199,000 in December. That is far higher than the 157,000 economists surveyed by Bloomberg predicted, and it marks the best reading since May 2015.


Stock futures climbed Wednesday morning, with the S&P 500 and the Dow Jones Industrial Average both up 0.9% in early trading.


Investors shouldn’t make too much of the ADP measure as a predictive gauge. ADP doesn’t seek to replicate the Labor Department’s methodology and the samples aren’t the same. ADP includes certain macro factors in its model, meaning it isn’t simply a survey of its clients’ payrolls. At the same time, revisions can be large and the gaps wide between it and Labor Department nonfarm payrolls.

Still, many traders and analysts value the monthly report as the last big clue ahead of the Labor Department’s employment report.


Mark Zandi, chief economist of Moody’s Analytics, which collaborates with ADP on the report, said mild winter weather “provided a significant boost” to the January employment gain. That was apparent especially in the leisure, hospitality and construction industries. “Abstracting from the vagaries of the data, underlying job growth is close to 125,000 per month,” Zandi said, which is consistent with low and stable unemployment.”


Economists have been anticipating that Friday’s nonfarm payrolls report would show an increase of 162,000 jobs, up slightly from December’s 145,000 and consistent with decelerating but still solid job growth. They sometimes revise their nonfarm estimates after the ADP report, and they might do so before Friday to account for a better-than-expected weather boost.


Some economists, though, are dismissing the blowout ADP number as indicative of Friday’s report.

“The usual caveat: ADP is far from infallible for signaling the BLS payrolls data,” said Rubeela Farooqi, chief U.S. economist at High Frequency Economics. She said that the initially reported rise in the BLS payrolls series was 63,000 lower than the initially reported ADP figure in December, while the BLS number beat the ADP number by 187,000 in November. “There may be some upside risk,” Farooqi said, but she continues to forecast a gain of 160,000 jobs in January nonfarm payrolls.


https://www.barrons.com/articles/adp-291000-private-sector-jobs-january-mark-zandi-payrolls-51580914880

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catkinZ8a

Wednesday, February 5, 2020

ADP Posts Blowout +291K New Jobs for January

onthly private-sector payrolls from Automatic Data Processing ADP for January posted their highest level this morning since May 2015, to a whopping 291K new private-sector jobs having been created last month. This is almost double the 150K or so analysts had been expecting. The previous month’s headline, itself a big upward surprise when first released at 202K, has only come down 3000 to a revised 199K.

The breakdown in type of job continues to advance Services over Goods, 237K to 54K, respectively. This amounts to job gains in service industries accounting for 77.3% of all new private-sector jobs in the U.S. last month. This bears out when we see the top two industries on the January ADP print, Leisure/Hospitality and Education/Healthcare, bringing in 96K and 70K new non-government jobs, respectively.

That said, Construction brought in a healthy 47K new private-sector jobs for the month. Manufacturing, which has been experiencing some difficult headlines in various metrics of late, still managed 10K for January. Medium-sized companies (between 50 and 499 employees) continued to lead the way last month with 128K positions filled, followed by Small firms with 94K and Large companies at 69K. These are strong figures, however you slice them.

The ADP report, of course, pre-dates Friday’s all-inclusive non-farm payroll report from the U.S. Bureau of Labor Statistics (BLS). Currently, expectations are for between 155-165K new jobs created for January, still well off today’s positive surprise from the ADP report. This follows a December BLS headline of 145K. Clearly, the BLS and ADP numbers are not aligned currently, though history shows they do tend to trend together over time.

One caveat ahead of Friday’s number, however, is a one-yearly change to benchmark BLS data scheduled to occur in the next report. Analysts have already warned there will be a downward revision to January’s numbers, which would further indicate the BLS results Friday morning will be significantly lower than today’s ADP surprise. Further, the Unemployment Rate is expected to stay unchanged at a half-century low 3.5%, while wage growth has stayed stubbornly low in the face of such a robust employment picture, only having grown 0.1% in the December report.

December’s Trade Deficit numbers also hit the tape ahead of the bell this morning, with a headline slightly worse than expected to -$48.9 billion. This follows a downwardly revised November read of -$43.7 billion. Though these numbers are not great, they are at least off the bottoming-out we saw back in December 2018, when our trade deficit sank to -$60 billion. Historically, there was no concern about the U.S. trade balance until about the 1980s, when borrowing to support a growing U.S. economy skyrocketed. This got much worse in the first decade of the 21st century.

Q4 and full-year 2019 results for Merck MRK came out this morning, as well. The Big Pharma firm beat the Zacks consensus by 2 cents to $1.16 per share in the quarter, outpacing its full-year guidance of $5.12-5.17 per share by posting $5.19 for the year. Revenues of $11.9 billion in the quarter were slightly beneath the $12.1 billion expected (though still +8% year over year) whereas full-year revenues of $46.84 billion came within the company’s $46.5-47 billion range. Merck also discussed a spin-off this year which would bundle slower-growth products into a separate entity. For more on MRK’s earnings, click here.

Mark Vickery
Senior Editor

https://finance.yahoo.com/news/adp-posts-blowout-291k-jobs-150903939.html

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Nana H

Has he caught Obama yet?

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catkinZ8a

How ADP Just Put a Very Strong Base on Friday’s Payrolls and Unemployment Report

With a multidecade low unemployment rate of just 3.5%, the ongoing debate is about how strongly the U.S. jobs market can keep chugging along. If Wednesday's report from ADP is echoed in this Friday's employment report from the U.S. Department of Labor, the job market is not rolling over yet. ADP reported that private sector payrolls added another 291,000 in January.

Econoday was calling for a gain of only 154,000 payrolls in January, and Dow Jones expected a gain of only 150,000. December's prior report was revised down to 199,000 from 202,000.

Gains were seen in all tiers of businesses for the 291,000 added payrolls. Small businesses added 94,000 and medium sizes businesses (50 to 499 employees) added 128,000 to their payrolls. Large businesses with 500 employees or more added 69,000 payrolls in January.

The gains were broad-based in sectors as well. Of the 54,000 in the goods-producing category, 47,000 came from construction and 10,000 additional positions came from manufacturing. Natural resources and mining saw a drop of just 2,000. The services sector added 237,000 payrolls, led by professional and business services (49,000), education and health services (70,000) and leisure and hospitality (96,000).

Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said:

The labor market experienced expanded payrolls in January. Goods producers added jobs, particularly in construction and manufacturing, while service providers experienced a large gain, led by leisure and hospitality. Job creation was strong among midsized companies, though small companies enjoyed the strongest performance in the last 18 months.

Mark Zandi, chief economist of Moody's Analytics, has been trying to tip his hat to a slowing jobs market for some time now. In early January, he noted that unemployment will begin to rise if job growth slows much further. In early December, Zandi noted that the job market is losing its shine and warned that unemployment will increase if job growth slows any further. And in early November, Zandi's warnings were more or less the same after saying that job growth has throttled way back over the past year. As for this very strong payrolls report for January of 2020, Zandi said:

Mild winter weather provided a significant boost to the January employment gain. The leisure and hospitality and construction industries in particular experienced an outsized increase in jobs. Abstracting from the vagaries of the data underlying job growth is close to 125,000 per month, which is consistent with low and stable unemployment.

The job market has been showing some cracks in the seemingly endless strength, but this January report almost feels like an outlier. After all, this was the strongest single month of ADP's payroll count since May of 2015.

Using the ADP payrolls report each month is not always an accurate way to benchmark the report from the Labor Department. Still, it is generally used for mirroring the direction of estimates. Econoday currently has a consensus of just 158,000 for nonfarm payrolls and 150,000 for private sector payrolls for January. Those estimates now likely will be nudged higher, by at least some margin, ahead of Friday's Employment Situation report.

https://www.msn.com/en-us/finance/markets/how-adp-just-put-a-very-strong-base-on-friday-e2-80-99s-payrolls-and-unemployment-report/ar-BBZGdrZ

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Kathy

He still can’t top Obama.

Trump Has Created 1.5 Million Fewer Jobs Than Obama

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catkinZ8a

In 3 years?

LOLOLOL!

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elvis

Great news.

But! Reagan is still top dog when it comes to job creation, both sheer numbers and percentage-wise.

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Nana H

No as compared to Obamas last three years. You didn' t know that? WOW

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Kathy

Trump lies.

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girlnamedgalez8a(8A)

And Trump is doing every thing he can to destroy the environment.

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elvis

Nana H

No as compared to Obamas last three years. You didn' t know that? WOW

Your statement doesn't make sense. That said, in doing further research on thisI'll make a correction as to which president created the most jobs in terms of numbers: that was Clinton, not Reagan. Reagan was tops for percentage of jobs created, and second as to number of jobs created, adding 16.5 million jobs .

Which president created the most jobs? You must look at percentage as well as the total number of jobs generated to compare presidents over time. It's much easier to create lots of jobs today since the economy is bigger. For example, there were 157 million people working in December 2018. That's more than double the 47.6 million employed in 1929, the earliest year counted by the Bureau of Labor Statistics.

With that in mind, Bill Clinton created the most number of jobs during his two terms. He added 18.6 million, a 15.6 percent increase.

Franklin Roosevelt created the most percentage-wise with a 21.5 percent increase. During his term, he had to recover from the depths of the Great Depression. But, it's not fair to use that because he was in office for more than two terms.

For a two-term president (like Clinton), the percentage winner was Ronald Reagan with a 16.5 percent increase...

A president's record at job creation depends somewhat on the business cycle. For example, those who inherited a recession, like Clinton, Obama, Reagan, Carter, and LBJ, did better at job creation. They started with a low base and so had nowhere to go but up. Those that created recessions, like both Bushes, Nixon, and Eisenhower, did the worst.

ETA:President Obama created 8.9 million jobs by the end of December 2016, a 6.2 percent increase.

https://www.thebalance.com/job-creation-by-president-by-number-and-percent-3863218

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Kathy


Trump is on a continuing trend. He gets credit for that. Is it the greatest? No.

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bob_cville

Just let Trump at that graph with a Sharpie. The results during his term would then be much better.

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elvis

Or you could just look at the actual numbers at my link. No opportunity for snark there, though. Just the facts, ma'am.

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