After ADP printed the biggest miss since Feb 2010 in May (adding the lowest amount of jobs since March 2010), expectations for June have been ratcheted down to just a 140k growth in jobs.
May also saw a collapse in construction jobs and so all hope was that this ‘blip’ was transitory… it wasn’t!
But, June’s ADP print was +102k, an improvement over the May (which was revised up from +27k to +41k), but below expectations of a +140k job gain.
“Job growth started to show signs of a slowdown,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
“While large businesses continue to do well, small businesses are struggling as they compete with the ongoing tight labor market. The goods producing sector continues to show weakness. Among services, leisure and hospitality’s weakness could be a reflection of consumer confidence.”
Small businesses and goods-producing business lost the most jobs (with mining and construction hardest hit)
Goods-producers saw jobs contract for the 2nd month in a row…
As did small businesses…
Mark Zandi, chief economist of Moody’s Analytics, said:
“The job market continues to throttle back. Job growth has slowed sharply in recent months, as businesses have turned more cautious in their hiring. Small businesses are the most nervous, especially in the construction sector and at bricks-and-mortar retailers.”
At first glance, bond yields and the dollar are down in response suggesting this is just bad enough to support The Fed’s rate cut trajectory.
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