Wednesday’s ADP jobs report for January missed expectations by a mile, showing a loss of 301,000 jobs against expectations for a gain of 200,000.
- ADP put the blame on the Omicron coronavirus variant for the first negative jobs figure since December 2020. The loss of 301,000 jobs in January is a particularly massive turnaround from December 2021’s 776,000 gain.
- The leisure and hospitality industries accounted for more than half of January’s job losses, posting a decline of 154,000.
- Stock, bond and crypto prices aren’t really responding, however, perhaps because the Biden White House had been prepping markets this week for some ugly job figures.
- However, one bad report caused by a spike in COVID-19 cases isn't likely to push the Federal Reserve off of its plan to begin hiking interest rates in March. S&P 500 and Nasdaq stocks remain modestly in the green. The 10-year Treasury bond yield is down one basis point at 1.79%. Bitcoin has dipped a bit, now off 2% to $37,700, with ether lower by 3% to $2,680.
- ADP's report is a warmup for Friday's government report on January payrolls. For the moment, economists continue to expect a gain of 150,000 jobs, down modestly from December’s 199,000 advance, and with the unemployment rate holding flat at 3.9%. For all of 2021, the U.S. added a whopping 6.4 million jobs, the best year on record, as the economy rebounded from the 2020 pandemic shutdown.
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