Contrary to popular belief, ADP private sector employment, which does not give much idea for NFP, was announced as 742K for April. In a sectoral context, it is seen that every sector has increased, except for the limited employment loss in the IT item. The total employment growth of the sectors operating in the services sector is 636K, so this increase is precisely the result of the easing of restrictions and openings. There is an increase of 106K in the production area, it is again positive.
Another factor is that April’s employment growth in terms of the size of businesses indicates a homogeneous distribution. Small businesses added 235K, medium-sized businesses 230K and large businesses 277K new jobs. In fact, we will detail this situation in the NFP preview tomorrow, but to summarize briefly; The issue of equal spread of economic recovery, Powell said two days ago, is important. At the beginning of the pandemic, we commented that “Big businesses have more ability to reverse lost employment, but small and local businesses will be much more difficult to get back up and compensate for lost turnover”. Because income has disappeared and fixed costs continue. The regional economy and the situation of the epidemic in the relevant region are also important. The further you move down the ladder in employment growth, the slower recovery will be.
We will have April non-farm payroll (NFP) data on Friday, and the market is expecting an increase of close to 1 million. There is an expectation of a decrease in the unemployment rate from 6% to 5.8%. However, although 14 million jobs were recovered last year, total employment in March was about 8.4 million lower than the pre-COVID peak, suggesting that the labor market recovery could go further. While Powell is still cautious for this reason, Yellen’s unwillingly announced “interest rate hike” card will make the degree of improvement in such data very important in the process leading to the FOMCs in the summer months.
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Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı