Fed chair Powell may now have another arrow in the quiver to delay any taper in quantitative easing (QE) as the ADP employment report showed new employment at super soft levels.
The forecast for the month of August was for 600,000 new jobs–while they actually reported just 374,000.
Of course the differences in the jobs report between ADP and the ‘official’ report which comes on Friday are many times massive–so until we see the government report on Friday we don’t know for sure. This is one of those areas that investors tend to ‘believe’ the government report while mostly ignoring ADP.
The forecast for the non farm payrolls on Friday is 720,000 new jobs–we’ll see. I think a really soft number–under 500,000 will send the 10 year treasury down a few basis point – back into the low to mid 1.20’s. Something in the million area will hold interest rates near 1.30%.
Honestly 1 number means almost nothing–but in the dog days of summer any news is worth milking for hours and hours by the talking heads on the business news.