{"id":840,"date":"2016-10-05T10:57:37","date_gmt":"2016-10-05T14:57:37","guid":{"rendered":"http:\/\/naroffeconomics.com\/?p=840"},"modified":"2016-10-05T10:57:37","modified_gmt":"2016-10-05T14:57:37","slug":"september-private-sector-jobs-non-manufacturing-activity-help-wanted-and-august-trade-deficit","status":"publish","type":"post","link":"https:\/\/naroffeconomics.com\/?p=840","title":{"rendered":"September Private Sector Jobs, Non-Manufacturing Activity, Help Wanted and August Trade Deficit"},"content":{"rendered":"

KEY DATA:<\/u><\/strong> ADP: 154,000\/ ISM (Nonmanufacturing): +5.7 points; Orders: +8.6 points\/ HWOL: -93,800 \/ Trade Deficit: $40.7 billion ($1.2 billion wider)<\/p>\n

IN A NUTSHELL:<\/u><\/strong> \u00e2\u20ac\u0153On this big day for data, it likes like the economy is strengthening even if job gains may not be great.\u00e2\u20ac\u009d<\/em><\/strong><\/p>\n

WHAT IT MEANS:<\/u><\/strong> With Friday being the day we get the September employment numbers, hints at what they may look like are analyzed carefully. ADP\u00e2\u20ac\u2122s report on private sector job gains came in a little lighter than expected, as increases in small businesses were soft.<\/em><\/strong> That may be due to some volatility in those numbers, but it could also be a warning about some softer economic growth. That said, the numbers don\u00e2\u20ac\u2122t imply a weak jobs report. ADP\u00e2\u20ac\u2122s average for August and September was about 165,000 per month. With only 126,000 being created in August, the government\u00e2\u20ac\u2122s number on private sector gains could be between 175,000 and 200,000<\/em><\/strong>, which is where I have it. One warning, government education jobs have been running above trend, so watch for that segment to restrain job growth. Also, the soft manufacturing sector could also lower the September number.<\/em><\/strong><\/p>\n

Adding to the uncertainty over Friday\u00e2\u20ac\u2122s report was the drop in help wanted ads online. The Conference Board\u00e2\u20ac\u2122s measure was down after being largely flat August. Still, the third quarter average was up from the second quarter,<\/em><\/strong> a turnaround from the large declines in the spring. That seems to imply the market has firmed, or firms are feeling the pressure, again, to fill all those open positions that they had decided not to bother filling.<\/p>\n

On the economic front, The Institute for Supply Management\u00e2\u20ac\u2122s NonManufacturing Index surged in September. The report was strong across the board as orders jumped, hiring increased sharply and order books started filling again. This reinforced the gains that were seen in Monday\u00e2\u20ac\u2122s manufacturing report<\/em><\/strong>, which was also up nicely, led by a major rebound in new orders. The strong rise in services hiring and the almost neutral manufacturing employment index holds out some hope that Friday\u00e2\u20ac\u2122s report could be better than expected.<\/p>\n

The trade deficit widened slightly in August<\/em><\/strong>. The major reason for the increase was payments for the broadcast right of the Summer Olympics, which disappears until the Winter Olympics starts. In other words, that was a temporary issue. Exports rose because of a surge in nonmonetary gold. <\/em><\/strong> Meanwhile, overseas sales of food and capital goods (aircraft) were down<\/em><\/strong> while the increases in vehicle and consumer goods shipments were relatively modest. We imported more of most things except consumer goods and industrial supplies (mostly nonmonetary gold, again). Adjusting for prices, trade could add to third quarter growth. <\/em><\/strong><\/p>\n

MARKETS AND FED POLICY IMPLICATIONS:<\/u><\/strong> The recent economic data seem to show that whatever malaise the economy was in during the first half of the year was reversed in the summer.<\/em><\/strong> But jobs matter, so watch Friday\u00e2\u20ac\u2122s number, which I expect to be around 190,000<\/em><\/strong> – but only because the private sector job gains in August were well below normal.<\/em><\/strong> It will be make up time, not a shift to better job gains. With the unemployment likely to decline slightly, there are few people out there looking for jobs who aren\u00e2\u20ac\u2122t already employed. Firms need to either poach workers from other companies or move their part-timers into full-time positions.<\/em><\/strong> Given the reluctance to pay up to attract workers, it is likely that job growth in the 150,000 range will become normal. That might appear disappointing, but slower job growth is what happens in tight labor markets. <\/em><\/strong> How investors read today\u00e2\u20ac\u2122s data-dump is unclear, but the numbers point to decent economic growth with job gains about as good as can be expected under the circumstances.<\/p>\n","protected":false},"excerpt":{"rendered":"

KEY DATA: ADP: 154,000\/ ISM (Nonmanufacturing): +5.7 points; Orders: +8.6 points\/ HWOL: -93,800 \/ Trade Deficit: $40.7 billion ($1.2 billion wider) IN A NUTSHELL: \u00e2\u20ac\u0153On this big day for data, it likes like the economy is strengthening even if job gains may not be great.\u00e2\u20ac\u009d WHAT IT MEANS: With Friday being the day we get … Continue reading September Private Sector Jobs, Non-Manufacturing Activity, Help Wanted and August Trade Deficit<\/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":[1],"tags":[],"class_list":["post-840","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/840","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=840"}],"version-history":[{"count":1,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/840\/revisions"}],"predecessor-version":[{"id":841,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=\/wp\/v2\/posts\/840\/revisions\/841"}],"wp:attachment":[{"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=840"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=840"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/naroffeconomics.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=840"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}