The second big miss

80 page jobs report

The ADP national employment number came in at 374 versus 64K estimate

  • prior month
  • Prior month revised to plus 326K from +330K. Recall from last month the BLS estimate for job gains came in at 943K. Since the pandemic, the ADP and BLS employment data has diverged
  • Small businesses saw a gain of 86K
  • Midsize businesses saw a gain of 149K
  • Large businesses saw a gain of 138K
  • Goods producing sector increase by 45K
  • Service providing sector plus 329K

Looking at specific industries, goods producing industries saw:

  • Natural resources plus 9K
  • Construction +30 K
  • Manufacturing plus 6K

Service producing industries saw job gains of:

  • Trade transportation and utilities, +18 K
  • Information, unchanged
  • Financial activity +13 K
  • Professional business +19 K
  • Education and health care, +59K
  • Leisure and hospitality, +201K
  • Other services, +19 K

Comments from ADP and Moody's analytics.

Nela Richardson, chief economist for ADP said:

  • "Our data, which represents all workers on a company's payroll, has highlighted a downshift in the labor market recovery. We have seen a decline in new hires, following significant job growth from the first half of the year. Despite the slowdown, job gains are approaching 4 million this year, yet still 7 million jobs short of pre-COVID-19 levels. Service providers continue to lead growth, although the Delta variant creates uncertainty for this sector. Job gains across company sizes grew in lockstep, with small businesses trailing a bit more than usual."

Mark Zandi, chief economist of Moody's Analytics, said,

  • "The Delta variant of COVID-19 appears to have dented the job market recovery. Job growth remains strong, but well off the pace of recent months. Job growth remains inextricably tied to the path of the pandemic."

The problem with the report is the divergence between the BLS and the ADP. What can you believe?

The premarket levels for US stocks show:

  • Dow up 122 points
  • NASDAQ up 61 points
  • S&P index up 17.25 points

Those levels are not too far off the earlier New York premarket levels.

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