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What Manufacturing PMI Reports Say about the Global Economy

PART:
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Part 11
What Manufacturing PMI Reports Say about the Global Economy PART 11 OF 15

Key ADP Report Highlights: 246,000 New Jobs in January

The ADP National Employment Report

The ADP National Employment Report for January 2017 came out on Thursday, February 2, 2017. The ADP report indicates a strong improvement in private sector employment of 246,000 in January 2017 as compared to the market’s expectation of 165,000. In December 2016, it stood at 151,000.

Key ADP Report Highlights: 246,000 New Jobs in January

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Key highlights of the December report

On a sectoral basis in January, the service-providing sector added 201,000 jobs:

  • The professional and business sector added 71,000 jobs.
  • The education and health sectors added 47,000 jobs.
  • The trade, transportation, and utilities (XLU) sector combined for an additional 63,000 jobs.

The 246,000 private payroll employment figures for January included an additional 62,000 employees in the small business category, about 102,000 in the medium business category, and around 83,000 in the large business category.

Impact on the market

The private job figures in January signaled stronger conditions for US (IWM) (QQQ) (VOO) (SPX-INDEX) private businesses. The non-farm payroll detailed in the January jobs report beat the market’s expectations and showed a great improvement in the labor market condition.

The Fed’s gradual rate hike

On February 1, 2017, the Fed declared that it wouldn’t change its key interest rate. However, earlier it said that there could be three rate hikes in 2017. The Fed’s hawkish tone is indicating that the economy may perform better in 2017. The improvement in the labor market is important for economic growth (IWM).

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