January 3, 2013
(This is Mark Vickery substituting for Sheraz Mian while he
is away this week.)
What Fiscal Cliff? This morning's payroll report from
) provided a big positive surprise in the private sector job
market: December saw growth of 215K jobs, much higher than the
149K expected. In addition, November's ADP numbers were revised
upward from 118K to 138K. So, as I said, What Fiscal Cliff?
We'd seen evidence of businesses cutting back on capital
spending in the wake of fiscal cliff uncertainty, but apparently
this has not translated to company payrolls, at least not in
December. In addition, with a 39K gain in construction jobs, we
see that the economic recovery being bolstered by the housing
market -- no doubt spurred by post-Sandy building -- continues
As of now, Friday's Bureau of Labor Statistics (BLS) non-farm
payroll report is expected to be 150K new jobs in December. But
this big ADP surprise may cause analysts to take a second look
before tomorrow morning's BLS report. In recent months, the ADP
and BLS reports have been pretty closely aligned.
Weekly jobless claims were also released this morning, rising
10K to 372K. This is above the 4-week average of 360K, but still
within our post-Sandy range. The holiday season is also a very
difficult one to see an adequate reflection of the overall jobs
market. Even more, jobless claims data from 9 states were
estimated for this morning's report due to holiday-related
Yesterday, the Dow gained 300 points and the Nasdaq shot up
3%. It seems to have become clear that the fiscal cliff
resolution passed by Congress -- no matter how temporary or
flimsy -- has created an early new year relief rally.
Will it continue today and tomorrow? According to the quite
rosy employment data this morning, chances look pretty good.
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