This morning we got two pieces of data, both of which were decent.
The ADP Jobs Report (which is a private survey designed to anticipate the official jobs report, which comes out Friday) beat expectations, The report said that private companies added 200,000 new jobs in July.
Meanwhile, the GDP report for Q2 came in at 1.7%, well ahead of the 1.0% that was expected. But then, Q1 was revised down sharply.
The GDP report — because it's GDP — will get all the headlines. But the real story is ADP today.
ADP is frequently mocked for being "wrong" because on a month-to-month basis it doesn't always align that nicely with the official number.
But here's what matters. The ADP report confirms that the economy in recent months has shifted to a faster clip of job creation, as not only did we get 200,000 new jobs this time, but we got 198,000 last month.
If you look at the last few months of official, Non-Farm Payroll data, you can see that we've been steadily hitting the 200k mark in monthly job creation, which is above where we were in years prior.
Of course, one month of ADP doesn't tell the whole story, and Friday's number could be a whiff, but today's report strongly confirms this new consistent level of job creation, and that's what matters to both real people (who care about jobs, not GDP) and the Fed, which is focused on strong job creation.
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