ADP Posts Upside Surprise in Jobs: 174K for January
Wednesday, February 3, 2021
Private-sector payrolls in January grew better than expected, as evident by this morning’s Automatic Data Processing ADP release. A total of 174K new private-sector jobs was several times higher than the 48K expected, following an upwardly revised -78K for December from an originally reported -123K last month. Services produced 88% of all new private-sector jobs in the month, 156K, to Goods-producing jobs having created 19K.
Education and Healthcare jobs regained the top spot after a few months of turbulence with massive Leisure & Hospitality re-hires (and subsequent re-layoffs), at 54K new positions last month. Business hires grew 40K, followed by Leisure & Hospitality growing again, +35K. The breakdown for Goods-producing jobs is much simpler: 18K to Construction, 1K to Manufacturing. Other segments, like Mining and Natural Resources, were flat for the month.
This marks the eighth month in the past nine that ADP private-sector payrolls have posted gains, going back to April’s pandemic death-grip on the labor market, which saw a loss of 19.4 million and set a new, hopefully insurmountable, low. Friday’s non-farm payroll report from the U.S. Bureau of Labor Statistics (BLS) is expected to yield 105K new jobs for January, from a crushing -140K posted for December. The Unemployment Rate is expected to remain at 6.7%, with a dwindling Labor Force Participation Rate.
After today’s opening bell, Markit Services PMI and ISM Services results are expected. Earlier in the week, the sister-reports Manufacturing PMI and ISM posted 59.2 and 58.7%, respectively. Expectations for today’s ISM Services print come in at 57.0%, for the eighth straight month north of 55%, going back to similar pandemic difficulties in April and May of last year.
Nasdaq futures are up again, pointing once more toward new all-time highs on the tech-heavy index. The Dow and S&P 500 are relatively flat, although they too have enjoyed a recent burst of enthusiasm. The closer financial relief is to passing Congress, the sooner consumer businesses will regain traction, with plenty of pent-up demand across a variety of industries. Cases of Covid-19 are finally off their post-holiday season peak, now at seven-day average totals not seen in four months. Approximately 34 million doses have been administered in the U.S. so far.
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