Hiring remains strong across sectors
The ADP January jobs report, which offers insight into employment trends, was published on January 31. The ADP report is prepared by ADP, a human management solutions provider, in collaboration with Moody’s Analytics.
Mark Zandi, the chief economist of Moody’s Analytics, said that the job market’s strong start in 2018 could mean that 2018 could be the eighth consecutive year where the US economy has added more than two million jobs. He said that the only reason that two million jobs wouldn’t be added would be a shortage of workers.
Sectors that improved last month
As per the January ADP employment report, job growth was negative only in the information sector (VGT), leaving all the other sectors with positive job gains. For 2017, the information sector was the only sector that reported net job losses. In January, the trade, transportation, and mining (XME) sector added 51,000 jobs, followed by the leisure and hospitality (PEJ) sector with 46,000 jobs. The most encouraging factor about the jobs market is the gain in manufacturing and construction (TOL) sector jobs, the two most important sectors that provide employment.
Key takeaways from the ADP January employment report
ADP reported job additions for January of 234,000, which is above the consensus estimate of 186,000. Market consensus expects the Bureau of Labor Statistics’ (or BLS) non-farm jobs at 184,000, which is below the ADP forecast. If jobs increase more than expected, markets could start pricing in a higher chance for a rate hike at the next FOMC meeting in March, which could push bond (BND) yields and the US dollar (UUP) higher.