Two Takes On The ADP Number

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Wed, 01/05/2011 - 10:08 | 848963 Quinvarius
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Service jobs are pure money velocity with no production to back them.

Wed, 01/05/2011 - 11:03 | 849161 More Critical T...
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The ISM number is just out, and it's a strong uptick - so I guess this validates the analysis of the "permabull" Goldman guy.


Wed, 01/05/2011 - 11:18 | 849198 4xaddict
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as long as this continues I am happy (sorry everyone in PMs). Gives me a chance to get in on this party. I want SLV at US25

Wed, 01/05/2011 - 12:01 | 849320 sethstorm
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Wed, 01/05/2011 - 15:27 | 850037 Panafrican Funk...
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The thing about the ADP numbers is that they don't give the full picture, ie., you have to look at total employed AND earnings of those employed people.  Where would we find such information?

Tables from Employment and Earnings Historical

Readily available.  Simply multiply the number of employees by the average weekly earnings, and voila, you have a good barometer of economic effect of employment on the economy.  Yes, I do realize that the numbers are still monkey'ed with, but looking at it through this lens at least gives you a relative means of valuation over time.  Where it gets particularly interesting is when you then bump this up against overall population data.  It becomes easy to see why even a 297K print at a constant weekly average wage isn't even treading water.

Wed, 01/05/2011 - 10:08 | 848965 unwashedmass
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yup. all those Christmas retail jobs....they really move an economy.

Wed, 01/05/2011 - 10:14 | 848990 Internet Tough Guy
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Yesterday there were headlines that Family Dollar will hire 6000. These are the types of jobs we create now; part time and low wage. Not the sort that allow people to buy into the stock ponzi or the high-end housing market.

Wed, 01/05/2011 - 10:21 | 849020 Hollow_Point
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Todays news is FDO missed their bottom line, just squeaked by their top line and estimates for the 2nd qtr were lower...

So much for growth.

Wed, 01/05/2011 - 10:35 | 849067 Cone of Uncertainty
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Yep, heigher freight costs and gross margin compression despite a 6.9% comp is a real bitch.


Stock off 8%.

Wed, 01/05/2011 - 11:27 | 849230 4xaddict
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interesting about the Christmas jobs, was in NYC for my first visit over the thanksgiving weekend and Black Friday saw more staff in many stores than customers........ that must mean everything is ok if businesses can afford surplus staff right?

Wed, 01/05/2011 - 12:03 | 849339 DosZap
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Have you been in one of these type stores,its pathetic.

Middle(formerly)class folks working as slaves for a lousy $8.00.

Barely eating and keeping roof over their heads.

Everything is a $1.00, and all the shit is Chinese.

The rage I feel when I see this is almost sickening.

Sad drawn faces, from 20-65yrs old, doing jobs illegals would not do 2 yrs ago.

Yet, Wall St, and the bankstas still getting huge bonus checks,I may hurl.

This is in a city with a per capita income of around 100k, and less than 17% of the pop is 50yrs old.

When someone says, WELL at least they have a JOB!, its all I can do to not deck them.These are not jobs, this is slave labor.

Wed, 01/05/2011 - 10:35 | 849070 Oh regional Indian
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Unwashed, heavy sarc and spot on.

here in India, everyone who looks at me with shining eyes and says how amazing India's Shining story is, I point out that the "surging" lower-middle class is mostly employed in:

1. Retail

2. Delivery

3. Call-Centers

4. Low-end construction (lots of it)

5... same vein. 

Some of them give me the old MaryJane argument, that these are gateway jobs.

Sure they are, gateway to Serfdom.


Wed, 01/05/2011 - 11:38 | 849267 ZeroPower
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But, to be fair, theyre employed correct? Im assuming its better than 1) unemployment or 2) rural living on a farm?

The main shining story as you put it of Indian and China is the new jobs being created to help fund the middle class. Yes its lower classes taking the jobs, but so what. Someone has to... do you not subscribe to this idea?

Wed, 01/05/2011 - 10:11 | 848976 LongSoupLine
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Looks like ADP got a massage with a "happy ending"

Wed, 01/05/2011 - 10:11 | 848980 Gordon Freeman
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You sure you didn't mix up the attributions?

Wed, 01/05/2011 - 10:17 | 849009 SayTabserb
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That's what I was thinking. No way Goldman would knock the report because someone forgot to "purge."

Wed, 01/05/2011 - 10:14 | 848986 ZeroPower
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Theres no real way to see this too bearishly. Firms needed more employees (probs part time?) to work the winter/Christmas time shifts.

Thats it.

Wed, 01/05/2011 - 10:13 | 848988 Dan The Man
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cheerleading at its best

Wed, 01/05/2011 - 10:15 | 848993 Skeptical_10016
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my money is with the former comment (mr yelvington) vs. the latter (newly found uber-bull GS)........with that being said, bouncing around off the bottom is pretty volatile and we are by no means experiencing "blowout" growth.........when ~20% of the workforce is un(der) employed + ~ 250k jobs required just to keep pace with demographics.........well these numbers (ADP) merely keep the unemployment rate from increasing.......nonetheless, we cannot lose sight of the current disconnect b/w the markets (RISK ON) vs. the real econ.......nonetheless, I don't see how the fed can fuel this rally for a sustained period of time as the initial conditions for the market (high P/E) necessitate that any earnings growth will most likely be offset by the P/E effect.........

~ Bucky Badger

Wed, 01/05/2011 - 10:16 | 849004 firstdivision
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ADP report is the most worthless indicator out there (minus all indicators in this free money environment).  It is about as good as the U Mich Consumer Confidence.


OT: Dollar gets stronger, and oil goes up?!? I wonder how much in losses the Fed took on their recent 10 and 30 purchases.

Wed, 01/05/2011 - 10:20 | 849022 RobotTrader
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The market has spoken.

The recovery is here.

No more need to own gold as a safe haven.

Wed, 01/05/2011 - 10:23 | 849035 Internet Tough Guy
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It must be hard to drive with your face pressed up against the glass. Life is confusing extrapolating every tick to infinity? LOL...

Wed, 01/05/2011 - 10:56 | 849132 Hephasteus
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I know he can get it under 1380 but can he keep it under 1380.

I'm not argueing that. If i were argueing that I'd be wrong.

I know he can get it under 1380 but can he keep it under 1380.

I'm not arugeing that.

I know he can get it under 1380 but can he keep it under 1380.

Welcome to joe versus the volcano week.

Ah the problems with illusory paper smash downs.

Wed, 01/05/2011 - 11:36 | 849038 plocequ1
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Yes, This is what the Market sees. So let it be written. So let it be done. Rally on, So sayeth Ramses II

Wed, 01/05/2011 - 10:26 | 849041 CU1981
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I'm hoping for $1250 ...


We can all dream can't we ? Or is that forbidden in central planning ?

Wed, 01/05/2011 - 11:30 | 849236 4xaddict
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that level makes TA sense to me too however, this is a strange market if it can be called that anymore.

Wed, 01/05/2011 - 11:29 | 849238 4xaddict
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that level makes TA sense to me too however, this is a strange market if it can be called that anymore.

Wed, 01/05/2011 - 10:28 | 849049 docj
docj's picture

The recovery is here.

Swell.  So does that mean Uncle Sugar will stop spending 12% of GDP in deficit?  And that Benron can call-off the QE-dogs?

Or is "recovery" just another word for "Ponzi" in your lexicon?

Wed, 01/05/2011 - 10:44 | 849095 Kina
Kina's picture

Market? There is no fucking market, you would have to be fairly thick to think there is a market and doubly thick to believe there is a recovery afoot. Honestly, sometimes a lot of trash comes from you.

Wed, 01/05/2011 - 13:58 | 849771 Hulk
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"The recovery is here"

That would explain the $150 Billion monthly deficit...    Got Gold?





Wed, 01/05/2011 - 10:24 | 849033 Grand Supercycle
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USD strength returns yet again...

As noted many times, it keeps occurring because USD larger time frames continue to give bullish warnings. And so I remain US Dollar bullish and Euro etc. bearish.

Wed, 01/05/2011 - 10:23 | 849036 e_u_r_o
e_u_r_o's picture

retarded euro has to start falling aswell obviously when gold falls thus making gold rise instead in euros. GODDAMNIT

Wed, 01/05/2011 - 11:08 | 849167 Hephasteus
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What are you talking about. You are simply seeing a "movement" of real physical gold and  bullshit lying paper gold between the central banks. Gold determines the value of every currency relative to every other currency. To weaken a currency you simply "move" gold from one currency to all the other currencys. To strengthen a currency you move gold from the other currencies into yours. The problem is these are all in allocated accounts and they are complete bullshit. Because the same cheating lying theiving bastards that ran the london gold pool run this one.

Price of gold in dollars 1366

Price of gold in euros 1038

ratio 1366/1038= 1.316

eur/usd = 1.324.

They usually match much closer. This means there will be a spike in price of gold in euro's coming at pm fix. Or gold is heading to 1290ish territory in dollars. There is a significant european US event occuring. Perhaps it's something to do with their budgets for next year.

Wed, 01/05/2011 - 10:30 | 849050 Salinger
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I can't wait to see how Rosie will spin this - I wonder when his performance review is scheduled? Hopefully for him it was before December.

Wed, 01/05/2011 - 10:28 | 849051 thepigman
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Okay, I'm thrilled the US is moving

heavily to part time service jobs.

Wed, 01/05/2011 - 10:32 | 849056 Cone of Uncertainty
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Exactly, all those Mom and Pops are now hiring another cashier, while reducing the hours for the other workers, for a net gain of ZERO!

Wed, 01/05/2011 - 10:34 | 849065 thepigman
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Let's all celebrate the permanently lower

standard of living. YAY!!!!

Wed, 01/05/2011 - 11:09 | 849171 sethstorm
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That's what happens when you confer divine right onto businesses.

Less jobs, more lording.

Wed, 01/05/2011 - 10:35 | 849063 onlymyopinion
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todays report seems to make sense....didn't we just have one of the best holiday shopping seasons?  contrary to "popular" belief, QE2 is working-----creating jobs and lifting equities.  Ben Bernanke isn't as dumb as many appear to think he is.  I will continue to ride the trend (up for 20 months now) until it changes.  I've seen too many try to go against Bernanke only to see their accounts blow up.  It's still a bull and will be a bull until it isn't.


Wed, 01/05/2011 - 10:49 | 849106 bonddude
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You want that burger medium rare mac?

Wed, 01/05/2011 - 12:18 | 849379 DosZap
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I predicted this shit prior to the holidays.

On this site.Americans are stupid children for the most part.

They pulled in their horns, paid off debt, and lived modestly(for Americans) for 2yrs.

ONCE the CC's and the family finances of those employed starting looking bearable, it was TIME to treat ourselves.

Meaning the ignorant mofos, went and spent themselves back into a hole.


Americans cannot STAY on any type of budget for over 24mos without losing their minds.They WILL spend..............guaranteed.

Wed, 01/05/2011 - 13:58 | 849766 Apocalicious
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Which is why a deflationary spiral has a 0% probability in America, the land of materialism...

Wed, 01/05/2011 - 10:48 | 849100 LawsofPhysics
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QE will work...  until it doesn't.  It is still a finite planet with finite resources.  Cheap energy and cheap labor drive economies, not cheap dollars.

Wed, 01/05/2011 - 10:50 | 849114 bonddude
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Well said.

Wed, 01/05/2011 - 10:58 | 849101 nopat
nopat's picture

I'd be careful shitting all over a spike in the jobs number from the services sector.  Let me be clear, I don't doubt there's a lot of part-time retail and headcount bleed-out baked in.  I also don't doubt there's probably some double-counting, as people take part-time holiday jobs in addition to their full-time employment, or as people switched employers (which I have seen quite a bit).  We're also seeing quite a bit of private-sector activity with developing/implementing major deployments, which will heavily weigh in on the services side of the jobs report, especially as consulting firms are increasingly handling most of the heavy lifting.  This coincides (imo confirmed) with the steel numbers we've been seeing.

The issues then become:

  1. How much of this temp work will translate into full-time employment?
  2. Will the debt markets cooperate long enough to allow deployment completion and give companies enough time to turn capital spend into revenue generation?
  3. Is this the next turn of the US economy (like we saw at the end of the 80s), or is this all too little, too late/too soon?

I don't know.  Historically speaking, whatever's going to dominate the next 10 years should be just big enough now that everyone will come out of the woodwork and say in hindsight the "called it".

Wed, 01/05/2011 - 11:01 | 849149 sethstorm
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  How much of this temp work will translate into full-time employment?

None. You can't lord over people as effectively as chaining together temporary contracts.




Wed, 01/05/2011 - 11:24 | 849223 nopat
nopat's picture

Agreed, but, it's similar to what we saw at the start of similar technological booms and the 20-year cycles.  Colleges, research firms, and individual inventors build on existing infrastructure; someone figures out a way to monetize it; companies wanting to cash in but not fully commit hire temp firms/consultants; the trend gains traction, companies start using "synergy" a lot and bring these folks in-house; saturation leads to a burst, but not before making a lot of people impossibly wealthy; lack of sector-specific investment opportunities result in a lot of cash flooding into the rest of the economy; financial products get savvy, crash, and money gets pulled until the "next big thing" appears.  Wash, rinse, repeat.

Wed, 01/05/2011 - 11:43 | 849276 sethstorm
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Or how about just kill the whole temp worker idea?  The ones that want it have no problem either way; the ones that don't want it are the ones that do.

Not everyone cares to be lorded over 4 months at a time. 

Wed, 01/05/2011 - 12:16 | 849380 Pez
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Doesn't matter these jobs are bound for "happy to have temp gateway jobs" in China, India... anywhere that's close to shipping ports. How many iPads are made in the USA?

Wed, 01/05/2011 - 17:48 | 850491 sethstorm
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Not enough.

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