The ADP Employment data this morning is putting the market in an optimistic mood. The ADP Employment Report is derived from a database of 500,000 US businesses that employ roughly 24 million people across all 19 of the major NAICS (North American Industrial Classifications). Each month they survey 365,000 of these businesses to determine how many jobs they’ve added. This month the Bloomberg Survey expected the ADP Employment Change to show that 70k jobs were added when in fact it came in at 93k jobs. Additionally the prior month level was revised upward from 43K to 82K.
Stock futures are up on the data and the 10-year is trading off. The 10-year Treasury is currently off almost a point to trade at a 2.90% yield. Tomorrow we have Initial Jobless Claims and Continuing Claims...these are generally bigger market movers than the ADP figure so if they disappoint we should see this 2.90% level on the 10-year drop.
Last month we saw that 407k people filed for Initial Jobless Claims. This month the forecast is for 424K to get in that line. Continuing Claims last month stood at 4.182 million…the estimate for this month is slightly higher at 4.2 million. A word of caution is needed here…as jobless benefits expire for millions of people going forward the Continuing Claims figures will become less reliable as an indicator of the state of the employment market.
Some interesting figures on Unemployment
Estimates from the Labor Department are that without another extension roughly 2 million people will lose benefits by the end of December. The average unemployment benefit check in the US is currently $302.90 per week. Multiply that by the 2 million people losing benefits this month and you’re looking at $618 million that won’t be fed into the economy each week through this program ($2.5 billion per month). It’s also interesting to note that if you annualize the average unemployment check it puts you right about at the Federal Poverty Line if you have 2 people in your family.
That’s all the data for today. If you have any questions or if there is anything I can be doing for you just let me know.
Steve Scaramastro, SVP
800-311-0707
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