Pre-market futures are up slightly this morning, countering the slight selloff we saw during Tuesday’s trading day. Economic news out ahead of the open bounced pre-markets higher momentarily, but currently we’re +20 points on the Dow, +8 on the S&P 500 and +50 points on the Nasdaq. Bond yields crept up a bit following these reports and in anticipation of the Fed meeting this afternoon.
Earnings reports ahead of the bell show a few big changes from expectations: Kraft Heinz KHC beat bottom-line earnings estimates by +7.8% to 69 cents per share in the quarter. V.F. Corp. VFC, the parent company of retail brands like Vans, Timberland, North Face and more, posted a slimmer-than-expected bottom-line loss, +31.5%. E-commerce marketplace Etsy ETSY, however, missed the Zacks consensus by -53.7% in the quarter.
“Jobs Week” continues this Hump Day with private-sector payrolls from Automated Data Processing ADP out this morning, coming in at +104K new private-sector jobs filled in July. This is a nice turnaround from the upwardly revised -23K reported for June, and well ahead of the consensus estimate for a mere +64K.
The breakdown of this data more closely resembles the “average” jobs report of the past, with Goods-producing jobs back up to around +30% of the total, +70% for Services, and the Leisure & Hospitality space leading all industries (+46K new private-sector jobs filled). Financials brought in +28K, Trade/Transportation/Utilities were +18K and Construction +15K. Education & Healthcare was the negative outlier: -38K.
Small companies (sub-50 employees) brought in +12K new private-sector jobs, while both medium-sized firms (50-499 employees) and large businesses (over 500) made +46K new hires for the month. Job Stayers averaged out a +4.4% increase, while Job Changers bounced back 20 basis points (bps) month over month to +7.0% — both metrics having moderated over the past couple years.
All in all, a solid month of privater-sector jobs growth. To paraphrase Mark Twain, “The reports of the death of the U.S. labor force have been greatly exaggerated.” ADP Chief Economist Nela Richardson said in this morning’s report, “Hiring and pay data is indicative of a healthy economy.” That said, we do see a strong pullback in jobs growth back to late 2024: the trailing 4-month average ADP jobs growth is +43K; the prior 4-month average is +173K.
The first print on Q2 Gross Domestic Product (GDP) outperformed expectations this morning: +3.0% versus the +2.3% anticipated — a nice bounceback from the -0.5% reported for Q1, and the strongest quarter for jobs growth (prior to pending future revisions) since +3.1% in Q3 of 2024. Meanwhile, the GDP Price Index came in lower than expected at +2.0%, the lowest since Q324, as well.
