Boockvar on ADP Jobs Numbers
From Peter Boockvar:
Quick ADP jobs rundown
ADP said 122k new private sector jobs were created in May, about as expected and vs 105k in April (revised from 109k initially). Businesses of all sizes added workers with the biggest contributor being those with under 20 employees, adding 49k jobs. Those with 500+ added 40k with more modest gains in between.
Again, the sector with the biggest hiring remains education/health services which hired a net 57k, followed by 36k in trade/transportation/utilities. Financial services, leisure/hospitality and professional/business services also added workers. The ‘information’ sector continued to lose them, by 9k in the month. Construction employment rose by 8k and manufacturing by 3k, partially offset by a 3k person decline in natural resources/mining.
ADP said “The labor market continues to show sustained momentum going into the summer hiring season.” Wage growth was similar to that seen in April with a 4.4% rise for ‘job stayers’ and 6.5% increase for ‘job changers.’ With inflation accelerating, the wage growth needed to offset it is ever more vital.
Bottom line, this brings the 3 month average to 96k vs the 6 month average of 67k and the 12 month average of 59k. ADP doesn’t separate out part time from full time and we’ll get more color on that Friday but overall the pace of hiring has been pretty good over the past three months relative to the more modest pace previously.
The 10 yr yield is knocking on 4.50% again in response, up 1 bp from just prior to the release and up 4.5 bps from yesterday. The 2 yr yield is higher by 3.5 bps today, 1 bp of which was right after the data release.
Positions: None.
