This morning is about the job market and of course, Europe. Initial jobless claims for the week ending December 31 fell from 387,000 to 372,000. After being stuck above 400k for the better part of the year, initial claims have now come in below 400,000 for eight of the past nine releases. This does show the labor market is moving in the right direction, albeit at a snail’s pace.
The shocker came from this morning’s ADP report on private payroll growth. The report was huge, estimating that 325,000 private payrolls were created in December. The largest increase was the 273,000 of service sector jobs. We will wait to see if this figure is validated by an equally positive nonfarm payroll report tomorrow, with current estimates at 150,000 new jobs. If the data is on the high side, as was ADP’s, this will be a game changer, and we could see a significant selloff in bonds. Stay tuned.
Despite the positive jobs data received this morning, U.S. stock markets are focused on escalating financial woes in the European banking sector. So we have stocks lower on the day and a slight improvement in bonds. Prices for mortgages are flat to where we ended Wednesday.
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