This morning payroll processing firm of massive proportion, Automatic Data Processing, reported that its estimate of December job creation in the United States was 297,000. The expected gain by a gang of economists was 100,000.
Analysis: Clearly this is a very, very favorable number. For the first time since the Great Recession the job creation figure GREATLY exceeds its estimate. It is difficult to argue that the increase (or, if it had been a decrease) is due to statistical error and likely to be revised. Even if this job creation of 297,000 is revised downward, it will still have exceeded expectations by a sizable magnitude.
I would expect that financial markets will go bezonkers (a technical term) today. This is because of the massively unexpected nature of the data.
I wrote on Monday about how I hate “no news moves” in the stock market – here though, there is ample justification. Or, in Jason Voss-speak, there is cause, so don’t pause.
Friday will bring the official Department of Labor statistics about jobless claims which will dispel any concerns that folks might have about the ADP data.
Importance grade: 10; without question this is one of the most important pieces of data to happen since the Great Recession ensued multiple years ago.
Jason
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