Musing About Jobs

Charles Payne
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Posted: Sep 01, 2017 12:01 AM
Musing About Jobs

Today we get the most important economic release in any given month: the Bureau of Labor Statistics (BLS) Employment Report. Coming into the week, consensus was 185,000 net job creation in August. That number is now much higher after the report from the ADP Jobs Report came in at 237,000 private sector jobs.  The news sparked the debate over who should get credit. In fact, businesses must bet on-the-come with respect to employees and inventories.

The election of Donald Trump clearly got a lot of businesses to instantly increase their hiring (see arrow) and lifted the bar for monthly hiring in the process.

The relationship between the ADP and the BLS reports has been one of hit-or-miss. Often, the ADP report is a good harbinger for government calculations. Only two months have shown glaring differences this year; the BLS number has been higher in the last two months.

In May, the ADP calculated 255,000 new jobs while the government only counted 50,000. April’s ADP saw only 148,000 new jobs versus the government’s tally of 207,000.

At some point, I hope we can implement low taxes, fewer regulations, and regain that American spirit. America is where everyone dares to dream; we could and should be hitting 500,000 jobs a month, which is right for the size of the current population. For now, 200,000+ jobs a month would be huge against the backdrop and challenges we are overcoming.

ADP Highlights:

Service +204,000

  • +56,000 Trade
  • +51,000 Leisure
  • +45,000 Education
  • +11,000 Financial
  • -3,000 Information

Goods -Producing Jobs +33,000

  • +18,000 Construction
  • +16,000 Manufacturing
  • -1,000 Mining

I continue to say goods-producing jobs are the best parameters for the health of the economy, and the underpinning foundation to build upon. These are good-paying jobs that put dads back to work, especially in the heartland. In addition, these high wages mend families and stem the opioid addiction plague.

We’ll know in 24 hours what the government data says. However, the BLS number is clear that the jobs situation is moving quickly in the right direction.

The Market

It was a solid session for stocks on Wednesday as tech resumed its winning ways along with materials (my favorite sector) before Hurricane Harvey got a boost from future rebuilding in Houston and the rest of the state of Texas.

Sector Performance
% Change
S&P 500 Index
 +0.46%
Consumer Discretionary (XLY)
 +0.72%
Consumer Staples (XLP)
-0.02%
 
Energy (XLE)
 +0.05%
Financials (XLF)
 +0.41%
Health Care (XLV)
 +0.52%
Industrials (XLI)
 +0.43%
Materials (XLB)
 +0.74%
Real Estate (XLRE)
 +0.46%
Technology (XLK)
 +0.72%
Utilities (XLU)
-0.29%