ADP said private sector job gains in June were 176k, well above expectations of 100k and May was revised up by 3k to 136k. The service sector contributed 160k of the jobs while goods producing were up by 16k with again small and medium sized businesses leading the gains. Manufacturing jobs grew by 4k and construction by 8k. Bottom line, the figure is a pleasant surprise but certainly doesn’t square with the initial jobless claims data over the past month. We’ll also see the employment component of ISM services today to get more color. Tomorrow’s private sector payroll gain estimate is 100k and will likely be revised up somewhat today on the heels of the ADP number.
Initial Jobless Claims totaled 374k, 11k less than expected and is below 380k for the 1st time since mid May. It’s down from 388k last week and the 4 week avg is now 386k from 387k. Continuing Claims rose by 4k but Extended Benefits were lower by 19k. Bottom line, we’ve now seen two jobs reports today that were pleasantly surprising ahead of tomorrow’s June payroll figure. The markets response though is muted as policy actions by the ECB, BoE and PBOC weren’t unexpected and maybe decent US jobs data won’t compel the Fed to do more QE (even though I think there is little doubt they’ll do more QE). With respect to Draghi’s ECB press conference, he’s not hinting at another rate cut by saying “inflation risks are broadly balanced in the medium term.”