ADP The ADP report released Wednesday evening Beijing time blew past expectations, coming in at 233K versus the 108K consensus. September was also revised up from 143K to 159K, the highest level since last July. By firm size... By industry, goods-producing added 22K, while service-providing added 211K.
Wage growth slowed for both job-stayers and job-changers, at 4.6% and 6.2% respectively
Overall, the data boosts confidence in the economy, showing continued labor supply growth and a resilient labor market.
Nonfarm Payrolls
October added only 12K jobs, far below the 100K expected. The severe deviation was mainly due to hurricanes and the Boeing strike.
Despite the huge miss, all three major indices closed higher on Friday
Before diving into the report, note that the nonfarm payrolls survey comes from two sources: the household survey and the establishment survey.
From the household survey, the unemployment rate held steady at 4.1%, indicating that employment levels were relatively stable, not as volatile as the headline number suggests.
Looking at the establishment survey, the response rate was very low, well below average, partly due to hurricane effects that cannot be quantified.
Let's break down the October report further
On wage growth, average hourly earnings rose 0.4% month-over-month, maintaining a 4% annual pace. Wage growth across the country remains solid.
The report also revised September down from 254K to 223K, and August from 159K to 78K. This shows that while September was strong, the overall trend is still gradually cooling, supporting further Fed rate cuts.
As a result, the CME FedWatch tool now prices in a 25bp cut at the November meeting with ~99% certainty.
Risk disclaimer: This content is for informational purposes only and does not constitute investment advice. Market risks exist; invest with caution.
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