Courtesy of Karl Denninger, The Market Ticker
Employment in the U.S. nonfarm private business sector increased by 91,000 from August to September on a seasonally adjusted basis, according to the latest ADP National Employment Report ® released today. The estimated advance in employment from July to August was revised down only slightly to 89,000 from the initially reported 91,000.
Remember, last month they reported 91,000 too, but the NFP came in with a big fat goose-egg.
Here’s the problem in this report: The entire gain was in the "service" sector. You know, doing things like pulling coffees? Yep.
There was no gain in construction, and the entire gain in services was in small and medium-sized business. This means that banksters weren’t gaining jobs, which is good. However, the jobs that were gained were probably low-paying, which is bad.
What I like even less is the Challenger report, which shows planned layoffs – it’s spiking. Coming into the holiday season this is decidedly negative and definitely marks something to watch.
On the NFP side for Friday I’m going to impute a small bump from last week’s decline in claims, and call +50,000. However, if the Challenger report is real next month will be red.
We’ll see how long it takes before the markets reacts to that — or if it does.
