News

Jobs Week kicks off in earnest this morning. Private-sector payrolls for April from Automated Data Processing ADP came in slightly higher than expected — +192K, from +183K consensus estimate — though down from the upwardly revised +208K the previous month, which was the hottest read since July of last year. Off lows of late ’23 and early ’24, private-sector jobs growth looks to be warming up again; the three-month average is now higher than the previous six months.

Importantly, wage growth looks to have simmered down. Those who remained in their current positions last month averaged a +5% raised (flat, month over month), while those changing their jobs saw a lower increase to +9.3% from +10% in March. We had seen these numbers lower more recently, but the main concern with an otherwise happily reported stronger labor market is the extra wage costs lumped onto the system. These look to be not heating up as fast as jobs growth, which is good.

Large companies (over 500 employees) brought the majority of new private-sector jobs: 98K. Smaller companies (fewer than 50 employees) had the fewest: 38K, with medium-sized firms taking up the remainder +62K. Generally speaking, big companies can offer better perks such as full healthcare and matching 401k benefits, though recently they had been lagging smaller companies in job growth. Leisure & Hospitality was back on top last month with +56K new private-sector jobs filled, followed by Construction at +35K and Trade/Transportation/Utilities at +26K. Notably, these tend to be industries which require less formal education.

Friday’s nonfarm payroll estimate is currently +240K new jobs filled. This Employment Situation report from the U.S. Bureau of Labor Statistics (BLS) has come back from a sub-200K trough period late last year, and now averages about 280K new jobs per month going back to December. BLS numbers and ADP figures don’t tend to align exactly in real time — they usually take a couple months of revisions to iron out overall moves in the domestic labor force. In short, employment remains strong, but expected to tick down a tad.

Jobs Week continues later today with the March JOLTS report. We’ll also see Construction Spending for March and ISM Manufacturing for April, along with the latest Fed decision on interest rates this afternoon at 2pm ET. Following this, we’ll be paying attention to Fed Chair Jerome Powell’s press conference. While no one expects any move on rates this time around — we’ve been between 5.25-5.50% since July of last year — how the Fed and Powell address still-high economic rates that do not seem to support rate cuts for the foreseeable future.

Mastercard MA beat estimates in its Q1 report ahead of the opening bell. Earnings of $3.31 per share outpaced the expected $3.22, and easily ahead of the $2.80 per share reported in the same quarter a year ago. Revenues came in at $6.35 billion, slightly better than $6.33 billion in the Zacks consensus. Yet the credit card giant guided to the lower end of its previous range looking forward, which has led to a -3% sell-off in early trading this morning. The stock had been up +7% year to date.

Estee Lauder EL stomped earnings expectations in its fiscal Q3 report this morning. A bottom line of 97 cents per share more than doubled the 48 cents anticipated, while revenues of $3.94 billion was slightly ahead of projections by +0.39%. Yet the cosmetics major, which had been trading flat year to date so far, is down -4% in today’s pre-market as guidance was lowered due to concerns in its Chinese markets.

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