ADP Employment Numbers - September

TRADEX GLOBAL INTERNAL COMMENTARY

ADP says that US companies added 162k jobs in September.  This is on top of an upwardly revised 189k in August.  The median forecast by economists was calling for 140k (what do they know?).  Either way, this is a good two months worth of data.  What Tradex likes is that the biggest increase in hiring came from companies with less than 500 workers.  This is happening in spite of the “fiscal cliff” which we will face in January and increasing regulation (red tape) in order to run a business in the United States.  I don’t think QE3, QE4 or QE5 will help as much as a more simplified tax code and less regulation in order to compel small & large businesses to hire more workers.  I subscribe that this country has lost its edge in many measures and we need to look in the mirror and say “we must change things!”  Oh well, we can save that discussion for another day.  Either way, the hiring is happening at the places where the workers are most likely to go out and spend and we certainly need that.  ADP reports have been known to be less accurate than the official government report, but we still expect a positive report.  If we can get the US Government to stop scaring all the employers, this trend may just continue and we as a country might just get back the edge we have had for hundreds of years. Keep nimble – Michael Beattie

EXTERNAL RESEARCH COMMENTARY

Companies added more workers than projected in September, evidence the labor market may be perking up, a private report based on payrolls showed. The 162,000 increase in employment followed a revised 189,000 jump in August, figures from Roseland, New Jersey-based ADP Employer Services showed today. The median forecast of 38 economists surveyed by Bloomberg projected a 140,000 advance. The hiring gains, which were led by companies with fewer than 500 workers, will help shore up consumer confidence and spending, which in turn will bolster economic growth. A Labor Department report on Oct. 5 may show private payrolls increased by 128,000 in September and unemployment rose to 8.2 percent from 8.1 percent the prior month, according to the Bloomberg survey median. “Small and medium-size firms continue to be the driving force behind job growth,” Ward McCarthy, chief financial economist at Jefferies & Co. Inc. in New York, said in a research note. “Hiring at startup and small firms will continue to be the key to the sustainability of the labor market recovery going forward.” Stock-index futures rose after the report. The contract on the Standard & Poor’s 500 Index maturing in December climbed 0.1 percent to 1,442.6 at 9:09 a.m. in New York.

Estimates for the ADP employment figures ranged from 90,000 to 190,000 in the Bloomberg survey.

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