June employment numbers from private-sector payroll firm ADP (ADP) came in better than expected this morning, with 281K new jobs created last month, notably better than the consensus 208K expected. The ADP number traditionally is released a couple days before the Bureau of Labor Statistics (BLS) non-farm payroll numbers, which will this week be released tomorrow morning due to the July 4th holiday on Friday.
May’s ADP number was unchanged at 179K, but in every other initial read, the numbers were up for the month of June: Goods posted 51K, Services 230K; Manufacturing was up 12K and Construction 36K. Small businesses gained 117K jobs in the month.
Tomorrow’s BLS report is expected to show 215K new jobs for June, but some economists are no doubt upwardly revising their numbers based on the strong ADP results. Also, the 10-year bond immediately jumped to 2.59% upon the ADP release.
These are the types of results we’ve been not only looking for but needing in order for our loftily-traded market prices to be justified. The second half of 2014 is anticipated by virtually everyone to hold most of the economic strength for the full year, and seeing impressive jobs numbers from ADP this morning are a good sign that at least some aspects of our economy appear to be on-track.
Fed Chair Janet Yellen will speak later this morning at the International Monetary Fund’s (IMF) about growth in the U.S. economy and Fed policy, among other issues. Based on recent quotes from the head of the Federal Reserve, we don’t expect anything too radical from Yellen’s oratory today. Also, U.S. factory order numbers are expected to be released this morning.
Certainly a lot to chew on considering this is a holiday-shortened week with expected low trading volume. Investors would do well to keep their eye on the ball of macroeconomic developments in order to best position themselves in the market for the second half of 2014.
Constellation Brands (STZ) beat estimates this morning, Rackspace (RAX) jumped in the pre-market on discussions of turning the company private and JPMorgan (JPM) CEO Jamie Dimon has announced his health problems, while not severe, will keep him from a planned visit to Europe in a professional capacity.
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