Insult To Injury: Lackluster Private Payrolls Cry Out For Stimulus Just As ‘Blue Wave’ Hopes Fade

If ADP is any indication — and it may not be, considering its poor track record for “predicting” NFP prints in the pandemic era – Friday’s job report could be disappointing.

Private employers added 365,000 jobs in October, well below the 643,000 the market was expecting. Just one economist predicted a lower print.

It’s not difficult to write the boilerplate copy on this one. The headline number suggests the waning fiscal impulse and attendant D.C. gridlock weighed on labor market momentum last month.

For what it’s worth, ADP has come in below NFP in four of five “virus months” (so to speak), but September actually marked a rare month of ADP > NFP outperformance.

The services sector accounted for the bulk of the gain in October, of course, but the numbers were less impressive than they were in September. Services added 348,000 positions, while goods producers added 17,000.

Leisure and hospitality was a big part of October’s gain. If caseloads continue to spiral in the US, it’s entirely possible that the once mighty US services sector could come under renewed pressure.

What’s important this week is the context. The path to a proper “blue sweep” now seems narrow indeed, which presages more gridlock in D.C. Remember, the biggest obstacle to sizable stimulus is Mitch McConnell and the GOP-controlled Senate. That will likely remain the case irrespective of the final result in the presidential race.

Fingers crossed for an upbeat NFP later this week. But, for Wednesday, the ADP disappointment is just fuel on the fire for the bull flattening impulse and duration bid.


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10 thoughts on “Insult To Injury: Lackluster Private Payrolls Cry Out For Stimulus Just As ‘Blue Wave’ Hopes Fade

  1. The worst possible scenario is playing out with the GOP retaining control of the senate. If Trump wins god help us all, if Biden wins nothing gets done. The biggest losers…the American people.

      1. Yes, certainly this fall the virus is going to impact heavily and this winter could be a nightmare. I fear we’ll end up with the worst scenario of Biden in the WH and a Red Senate who decides there is absolutely no reason not to let people suffer for denying them another 4 years of Trump.

    1. Remarkably it is looking that way, that people voted against their own, best economic interests. I guess they needed more psyops applied on them as they couldn’t figure it out on their own.

      I just don’t see any euphoria occurring in the markets if control is split. It’ll be a rest period and playing the bond trade. Stagnation is afoot. We’ll see.

  2. The bounce in rates is over. In a few weeks, we could be talking about rates go to zero on the short end and how TLT is aiming to 190. We’ll see what happens.

  3. US voted for a plutocracy…..all those Pub voters are more interested in guns and abortions than they
    are their family’s well being.
    It’s been a good time to be wealthy for the last 45 years……not such a good time to work for wages.

  4. While the results are bad for small businesses and young people it does provide an educational opportunity over the next 4 years. In that time it will be possible to educate people about socialism, economics and general governance.

    I tell young people l meet that I do not know if they are Generation X, Y or Z but I do know they are ‘Generation Screwed’. I also ask people if they can name which country has the largest socialist project in the world. Few guess correctly, it is the USA and the project is the US interstate system. I would bet that most of your readers cannot connect these dots.

    I summarize with the quick summary below.

    Socialism describes Q.E. government manipulation in stock markets which helps the already rich the most. Socialism also describes myriad farm programs. Socialism also describes the Interstate system and other free roads. Interesting how those most benefiting by our socialist functions hate the word socialism. Seems they hate not socialism but the thought that poor people might derive benefits from our government. An attitude which is antithetical to Jesus Christ and therefore Anti-Christ.

    Our government as an income taxing authority gets a discount on all spending for the poor by way of income taxes as the money rolls through society, This discount can be as high as 80%. Allowing our government the ability to create as much as 5 loaves of bread out of one. However if you give a rich man money through tax cuts it is not spent for generations, depriving business and the government of funds.

    I am sure your readers can fine tune the 5 loaves of bread analogy and my estimate is likely high. However the point remains, if you prefer Jesus Christ miracles, The Federal Government is the only entity that can create miracles on the same scale as those tales from yesteryear.

  5. I don’t know why the markets can’t figure out that there will be no more stimulus for the “real” economy. The big boys feel a strong urge to keep at least one foot on the necks of the “little people.” They bought the votes they needed and they will now just go off and do what they want. Look for the boss to semi-retire to the FL White House while the loving wife moves back to NY, with no more pretense needed. The saddest thing about all of this is that there is not a single effective leader with the right instincts in either party; I mean Pence vs the Keystone Cops. If that’s our future we have no future.

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