If today’s ADP print is indicative of what we can expect from the January jobs report on Friday, Donald Trump may end up on top of the White House beating his chest, King Kong style.
US firms added 291k jobs last month, ADP said Wednesday. That is a huge beat to consensus and the best number since May of 2015. The market was looking for just 157k. The range was 137k to 230k.
Gains were broad-based, with goods producers adding 54k jobs (47k in construction and 10k in manufacturing), and the service-providing sector adding 237k.
“The labor market experienced expanded payrolls in January”, Ahu Yildirmaz, vice president and co-head of the ADP Research Institute remarked, adding that “job creation was strong among midsized companies, though small companies enjoyed the strongest performance in the last 18 months”.
Frankly, this bolsters Trump’s economic narrative, as championed loudly during Tuesday evening’s SOTU. The US president was, for lack of a better word, militant about the economy.
Only natural resources and mining lost jobs last month.
“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”, Mark Zandi said of the data, before noting that if you “abstract from the vagaries of the data, underlying job growth is close to 125,000 per month, which is consistent with low and stable unemployment”.
Weather or no, this is just more fuel to the risk-on fire, especially coming on the heels of Monday’s better-than-expected ISM manufacturing number. If ISM services beats later Wednesday, that’ll be the cherry on the proverbial sundae.
Great but jobs are a lagging or at best a coincident indicator