ADP data arrives weaker than expected with 150k jobs added

Data from ADP shows that the economy added 150,000 private sector jobs in June, falling below analyst expectations of 165,000. US equities (^GSPC, ^DJI, ^IXIC) are beginning to trade lower on Wednesday morning in response.

Yahoo Finance Anchors Brad Smith and Madison Mills break down the latest jobs numbers and what the data means for the labor market and the broader stock market.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Nicholas Jacobino

Video Transcript

Our top story this morning.

We’re tracking stock futures.

They are a little bit weaker.

The latest jobs data came in weaker than expected for the month of June.

This came in the form of AD P private payrolls, 150,000 jobs added last month in the private payrolls versus the 165,000 expected by the street.

Now another sign of a cooling labour market.

And investors are hoping this could push the Fed to cut rates sooner rather than later.

Well, I regret to inform you that the Fed is probably not going to pay too close attention to the ADP number as much as they do some of the other employment readings, notably here, when we’re thinking about the more cyclical and weekly jobless claims, but then also the all important monthly jobs report, which is going to come out on Friday here and give us a little bit more of a sense of where the unemployment rate that the Fed is tracking is trending right now, too.

Yes, it’s going to be critical because continuing claims here have really surged over the course of the past four weeks to their highest level since November of 2021.

This is also expected to continue, given some seasonal factors that are going to weigh on the data.

For example, automakers are set to shut down their plans for some manufacturing and maintenance updates over the summer.

That could lead to a surge in those initial jobless claims.

Moving forward is that group of individuals who might get impacted by that seasonal maintenance over the summer could seek their own initial jobless claims.

That could lead to some upside surprises in that number.

And this critical because there’s been this question and Stewart Kaiser came on and talked about this from City about whether the labour markets slowness that we are starting to see is indicative of a broader slow down in this economy that could be a really negative factor for the Federal Reserve is they do try to have this Goldilocks impact on the economy.

Kaiser, saying that the labour market could be our sign into whether or not we are at a tipping point or if it’s just casual weakness.

Story continues

Yeah, looking through some of the other details of this private Rolls Prince, uh, the chief economist over at AD P Nayla Richardson had actually mentioned within this release, the job growth has been solid, but not broad based here.

Had it not been for a rebound and hiring in leisure and hospitality, of course, the hardest hit sector on the onset of the pandemic.

Uh, if it had not been for that sector, June would have been a downbeat month, she noted.

So we’re actually gonna have much more in that conversation.

Of course, with Nayla Richardson.

Uh, people can stay tuned during the 11 a.m. hour where we will have her speaking with us and giving a little bit more of her insight into this.

But of course, you think across some of the different industries that saw the biggest increases, the changes by industry construction was up by about 27,000 services.

That was up by about 15,000 for at least trade, transportation and utilities.

Uh, and we’ll see exactly what this may carry over into, uh to to some extent into that monthly employment situation that we get on Friday as well