The recovery of the US labour market continues. ADP reported 2.369mn jobs were added in June. This was accompanied by a sharp upward revision to May’s report (initially reported as a loss of -2.760mn job and now revised to a gain of +3.065mn. That might bring it closer to the May non-farm payrolls report (+2.509mn) but is nonetheless a rather astounding revision, which perhaps encapsulates the problem of accurately measuring the Covid shock.
First glance shows positive surprises for Wednesday’s data releases. First, we had the October ADP report which recorded a 125k jobs gain versus the 100k consensus. But there was a decent downward revision to September (-42k) and the underlying rate of growth continues to decelerate.
Another weak ADP number, both for the current month but notably also the sharp downward revisions to the August release. The private sector survey suggested 135k jobs were added last month from a downwardly revised 157k in August. If we compare Q3 job creating this year to last year the total has slowed from 642k to 434k, t’s quite a drop.
Another weak ADP private sector jobs report with just 102.2k jobs created in June. That marks an improvement following the very weak May release but still drags the 3m average down to 132.7k, the lowest since July 2012. The ADP breakdown bears out the problems of the construction sector, with a second consecutive month of declines while small businesses also showed another contraction in jobs.
For those sensitive to bad data its not a good update. The May ADP report saw job growth slump to a meagre +27.3k jobs, the weakest outturn since March 2010. Some sectors seem to have been hit by temporary factors, with the decline in construction particularly notable. But while this sector can ebb and flow you still have to go back to the end of 2010 to get a worse reading.
The US April manufacturing PMIs are all now in following today’s ISM release and the picture looks pretty bleak with a big slide from what had looked to be a healthier March release. There was a notable deteriorating in the orders side with export orders sub 50.0 for the first time since the 2015/16 China slowdown.