A scene from one of my favorite movies: Groundhog Day.....
"You want a prediction about the weather, you're asking the wrong Phil. I'll give you a winter prediction: It's gonna be cold, it's gonna be grey, and it's gonna last you for the rest of your life."
HAHA (sick laugh). Irony at its finest! That statement perfectly describes the feeling of RANGE EXHAUSTION
Phil didn't see his shadow today. That means the world's most famous (ONLY) groundhog weatherman is calling for an early spring. I have no clue how credible this rat's forecasts are but I do know the ADP report lost some credibility with the market last month when its read on December private payroll growth was almost triple the official Employment Situation Report.
So it was not surprising when the market looked past the January ADP report this morning.
Private-sector employment increased by 187,000 from December to January on a seasonally adjusted basis, according to the latest ADP National Employment Report® released today. The estimated change of employment from November to December was revised down by 50,000 to 247,000 from the previously reported increase of 297,000. This month’s ADP National Employment Report suggests solid growth of private nonfarm payroll employment heading into the New Year. The recent pattern of rising employment gains since the middle of last year appears to be intact, as the average gain over December and January (217,000) is well above the average gain over the prior six months (52,000). Strength was evident within all major industries and across all size business tracked in the ADP Report.
Regardless of Mother Nature's unknown statistical influence on this data, the overall payroll trend is obvious....IT'S POSITIVE.
Clearly the Household Survey portion of the Employment Situation Report paints a much different picture of reality than the Establishment Survey. Wall Street tends to focus on the payroll growth implied by the Establishment Survey while Main Street experiences the reality of high unemployment in the Household Survey. Main Street is being left behind as unskilled labor positions are exported overseas and businesses invest in automated technology to improve productivity on the assembly line. Got no job? Better get an education...
So yeh the positive trend in payrolls growth makes stock traders feel all warm and fuzzy, but the real unemployment rate isn't getting any better. We're dealing with a two headed labor market monster. Wall Street doesn't seem too concerned about Main Street at the moment.
I wonder if it's gonna take a civil uprising on Main Street to get the market's attention on Wall Street.
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