Labor Data Dominates Headlines. Treasury Announces Refunding Package
News from the labor market dominates the data front for the next few days, beginning with the ADP private employment report early this morning.
The survey, just released, indicated that 371k private jobs were lost in July, a harsher figure than the -300k median forecast, but an improvement from the -463k print in June.
“Despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least several more months, albeit at a diminishing rate,” noted spokesman Joel Prakken.
Ian Shepherdson, economist at High Frequency Economics, said the ADP survey was a worthy guide in June but that’s not to say it will be accurate this month. “Unfortunately there is no guarantee of a repeat performance in July; the medium-term correlation between ADP and the official numbers is good, but it can be very wrong in individual months,” he said.
Forecasts for the official figures on Friday look for total employment to fall 300k, but some analysts may revise their estimates lower following the ADP release.
Just prior to the release, equity futures were roughly flat, but stocks have seen a modest pullback since 8:15. Still, there’s other reason for optimism.
“The market looks to extend a four-day winning streak and consolidate above the 1,000 level,” said Sal Guatieri from BMO Capital Markets, prior to the ADP release. “Stronger-than-expected U.K. data and growing odds that the Senate will pass an expanded ‘cash-for-clunkers’ program are also buoying investor spirits.”
The S&P 500 closed above the 1,000 mark on Monday for the first time since October.
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