Since job gains peak mid-cycle, don’t expect the jobs report to throw the Fed off course

Quick message here prompted by the ADP payroll numbers

Now, the ADP numbers don't line up with the official payroll numbers released two days later but they are a good proxy for directionality if you look at the rolling 12-month change in payrolls.

Job growth in 2018 is slowing. And that's to be expected. As I pointed out in January, growth in non-farm payrolls peaks mid-cycle. You simply won't get the kind of numbers now that you got in 2016 or 2017.

So when you read news stories telling you the ADP number of 178,000 was short of expectations of 190,000, take that with a grain of salt. It doesn't matter. Not only is 178,000 close enough statistically that it doesn't matter, but it also is high enough that it won't change the Fed's tightening bias.

The Fed is going to raise the Fed F...


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