Optimistic expectations for Friday's government jobs report took a big hit on Wednesday, after the release of the ADP private sector payrolls report showed employers cut 23,000 more jobs in March.
That doesn't mean we won't get a positive number on Friday -- the ADP report typically undercounts the government's numbers, sometimes by a very large margin. Friday's count is sure to be significantly boosted by as many as 100,000 new Census hires.
But analysts were already warning that even a rosy total like a whopping 200,000 jobs added in March would be suspect, given the temporary nature of the Census jobs plus a possible artificial rebound from February numbers depressed by northeastern blizzards. Since the consensus expectation for March's ADP report was that private payrolls would add 40-50,000 jobs, the actual number ranks as a serious disappointment.
The numbers do offer some clarity on the nature of bond investor priorities, however. The market for U.S. Treasurys immediately rallied on the news, with yields on the benchmark ten-year-note dropping down from last week's high. That would appear to support the theory that the recent weakness in the Treasury market has more to do with perceptions of the economy's health than with fears about the longterm budget implications of huge deficits. At the slightest sign of continuing weakness in the job market, the flight to Treasury safety resumes.
The moral of the story? Politicians need not fret about the bond vigilantes. First priority: Fix the job market.
Shares