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.
Tags: Labour Market
Bleak payrolls report. While the median survey was always going to be a short in the dark, the -701k decline in jobs was significantly more troubling than the mkts -100k guess. That’s the worst number since March 2009, a period of losses that saw five consecutive payrolls figures below the -700k mark starting from November 2008. Looking at the past fortnights jobless claims figures the April number and revisions to this release will paint an even bleaker picture of the labour market. In the household survey nearly 2.987mn jobs were recorded lost.
ADP reported fewer than expected job losses for March, with a modest -24k drop (mkt -150k), which compares to the 3.3mn jump in initial jobless claims last week. Partly this is due to the survey dates (it tallies responses up to the 12th of the month). So we will see catch up next month. Prior month was revised down to 179k from 183k.
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 positive surprise on the wages front with a strong pick up in the headline data. The rebound in weekly wage growth was partly due to a more favourable hours worked comparison though. Hourly wage growth has been steadier. Alongside steady inflation means real income growth has improved, continuing the recovery we’ve seen in recent months.
A positive surprise, particularly after the weak ADP number on Wednesday, with non-farm payrolls +224k in June, although there were mild downward revisions for the previous two months (-11k).
Modest improvement in the UK wages story. But it still appears that nominal gains are topping out with data flattered by the number of hours worked (at 32.2 vs. 31.8 in the same period a year ago). The stabilisation in nominal growth rates is not necessarily bad news for consumption given that inflation also looks to be moderating again, certainly at the headline level.
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.