Cold weather was, again, to blame for poor data as the ADP January payrolls came in lower than expected. An increased of 175K jobs were before the 191K general consensus. December’s jobs report was revised lower to 227K from 238K. Even the revision shows the total disconnect from the ADP payrolls report and the official US non-farm payrolls. The revised 227K surveyed by the ADP Research Institute is still far exceeding the un-revised 74K jobs added, according to December’s non-farm payrolls report.
According to economists, the sporadic colder than average temperatures were to blame in hiring as the hopeful continue to grasp onto data from October and November in order to try and justify to labor market optimism. Mark Zandi, chief economist at Moody’s Analytics Inc., said “underlying job growth, abstracting from the weather, remains sturdy.” And time will tell if the higher gains in employment were due to seasonality as over half of the jobs created were either part-time or temporary.
Friday’s non-farm payrolls may or may not count for much. If the data shows less than expected gains in employment, market participants can blame the weather, and if it beats expectations than the labor market is healthy again. The average gain in non-farm payrolls over the last 13-months is 163K, which is nothing to be excited about.