They received it Wednesday in the form of a report from ADP that showed private-sector payrolls missing expectations. Far from selling off in response, major U.S. stock indexes traded mixed, with the tech-heavy Nasdaq Composite climbing to its 33rd record finish of 2021.
There is a logic to that, given how the growth-oriented tech sector is sensitive to interest rates. The coronavirus pandemic also has shown that tech giants can thrive when the rest of the economy suffers.
An alternative explanation would be that the ADP report, of late, has lost its predictive power. While the standard deviation between the jobs reports from ADP and the U.S. government has never been worse than over the last 18 months, according to Bespoke Investment Group, other economic reports also are showing a topping out. Vehicle sales slumped and the two major manufacturing reports were mixed. That is not to say the economy isn’t recovering, it’s just that the pace of the rebound is slowing.
Powell’s speech left plenty of openings for the central bank to wiggle out a promise to reduce bond purchases this year. It looks like markets would be more than happy for the Labor Department to report Friday that in August far fewer than the 720,000 new jobs economists expect were created.
—Steve Goldstein
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Big Employers Hiring Tens of Thousands of Workers as August Jobs Disappointed
Payroll provider ADP said the Delta variant hurt hiring in August, explaining why private companies added only 374,000 jobs, well short of the 600,000 expected after significant growth in the first half of 2021. Still, employers are hiring with Walmart, Amazon, and Fidelity seeking around 70,000 jobs.
- ADP comes before the government’s broader report on August jobs, including nonfarm payrolls and the unemployment rate. Markets want a solid report, but strong employment figures could raise concerns about the end of stimulus from the Federal Reserve.
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Walmart
is hiring 20,000 full- and part-time workers for its supply-chain operations, where wages average $20.37 an hour, plus it is paying workers a $150 cash bonus for getting coronavirus vaccinations. -
Amazon
is hiring thousands of hourly workers in its operations network, on top of more than 40,000 U.S. corporate and…
Read More: Heading Into Jobs Report, It’s Back to a Bad News Is Good News Market