{"id":1449,"date":"2019-01-30T11:22:24","date_gmt":"2019-01-30T16:22:24","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=1449"},"modified":"2019-01-30T11:22:27","modified_gmt":"2019-01-30T16:22:27","slug":"indicator-january-private-sector-payrolls-and-december-pending-home-sales","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=1449","title":{"rendered":"INDICATOR: January Private Sector Payrolls and December Pending Home Sales"},"content":{"rendered":"\n


<\/strong><\/p>\n\n\n\n

KEY DATA:<\/strong> ADP: 213,000; Construction:\n35,000; Manufacturing: 33,000\/ Pending Sales (Monthly): -2.2%; Over-Year: -9.8%<\/p>\n\n\n\n

IN A NUTSHELL:<\/strong> \u00c2\u00a0\u00e2\u20ac\u0153Even in the face of the partial government shutdown, January job gains could be better than expected.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n\n\n\n

WHAT IT\nMEANS:<\/strong>  The broken record that I am keeps saying that\nthe underlying economy remains solid and the issues with the equity markets are\nnot the result Fed tightening or a realistic estimate on when the next\nrecession could start.  So, it\u00e2\u20ac\u2122s\ntime to start focusing again on the economic fundamentals and Friday\u00e2\u20ac\u2122s jobs\nreport should give us some insight into how businesses reacted to the political\nabsurdities versus the real economy.  If\nthe ADP estimate of January private sector payroll growth, the shutdown may\nhave been much ado about nothing.<\/em><\/strong> \nThe employment services firm\u00e2\u20ac\u2122s reading of job gains came in above\nexpectations.<\/em><\/strong>  The increases were\nwidespread, with small, medium and large firms adding similar numbers of\nworkers and just about every industrial sector hiring as well.  What is eye opening was the continued\noutsized jump in manufacturing and construction payrolls.  Together, they make up less than 16% of private\npayrolls, but the rise in those sectors accounted 32% of the January increase.  That surge is not sustainable<\/em><\/strong>.  In addition, firms that fall into the 500 to 999-worker\nrange have also been adding workings at an elevated pace.  The implication is that job gains may remain\ngood, but don\u00e2\u20ac\u2122t expect continued large increases in private sector employment<\/em><\/strong>.  <\/p>\n\n\n\n

As for the housing market, well things don\u00e2\u20ac\u2122t look\nthat good.  The National Association of\nRealtors reported that pending home sales eased again in December<\/em><\/strong> and were off by nearly ten\npercent from the December 2017 level. \nFor all of 2018, pending sales were of by 3.5%.  You have to sign contracts to have closings\nso the consistent drop in pending sales signals future weakness in existing\nhome sales.<\/em><\/strong><\/p>\n\n\n\n

MARKETS AND\nFED POLICY IMPLICATIONS:<\/strong>  Today\u00e2\u20ac\u2122s\ndata reinforce the view that businesses are still seeing strong demand and as a\nresult, are hiring more workers.<\/em><\/strong> \nBut there is also growing weakness in the housing market.  The FOMC is finishing off its meeting<\/em><\/strong>\nand we should know the members\u00e2\u20ac\u2122 thinking in a little while.  Caution is likely the operative word, though\nthe ADP jobs report, if born out by a solid government number on Friday, would\nnot support that attitude.  The economy\nis in good shape<\/em><\/strong>, for the most part. \nWhat is failing is government policy <\/em><\/strong>and that is creating chaos\nthat is hurting the equity markets.  The\nFed, in my view, is overreacting to the equity market issues.  But I want to hear what Mr. Powell has to say\nbefore making any further comments.   <\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: ADP: 213,000; Construction: 35,000; Manufacturing: 33,000\/ Pending Sales (Monthly): -2.2%; Over-Year: -9.8% IN A NUTSHELL: \u00c2\u00a0\u00e2\u20ac\u0153Even in the face of the partial government shutdown, January job gains could be better than expected.\u00e2\u20ac\u009d WHAT IT MEANS:  The broken record that I am keeps saying that the underlying economy remains solid and the issues with … Continue reading INDICATOR: January Private Sector Payrolls and December Pending Home Sales<\/span> →<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,1],"tags":[],"class_list":["post-1449","post","type-post","status-publish","format-standard","hentry","category-economic-indicators","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1449","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1449"}],"version-history":[{"count":2,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1449\/revisions"}],"predecessor-version":[{"id":1451,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/1449\/revisions\/1451"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1449"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1449"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1449"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}