ADP leading NFP?

Macro Perspectives: Thu 5 Aug 2021

The July ADP jobs report showed 330k jobs added - a big miss - the expectation was 653k.

The July data was supposed to be our first glimpse at what the job market looks like after half of the states have withdrawn from the federal unemployment subsidy - in effort to incentivise people to go back to work. The jobs number came in lower, not higher.

Why? The move by state governors to reject federal unemployment money was offset by more "relief" government handouts.

The Biden administration launched the child "tax" credit last month - that seems to have kept people at home and Biden has proposed running it through 2025. It’s playing out like another step toward the administration's universal income gameplan (i.e. my bet is, it's permanent).

As we've discussed, it's not really a credit. It's a direct payment, it’s cash and it's not really a "tax" credit, as those that do not pay taxes, receive and will continue to receive direct payments.

So, this is (in my thoughts) the likely culprit for the continued labor shortage. The ADP report likely  telegraphs a "below expectations" government jobs report on Friday.