US DATA: Solid Payrolls Job Creation In March [1/2]
The jobs side of the establishment survey was generally solid. Whilst there is only so much that can be taken from it with labor data being a lagging indicator and forward-looking growth implications from tariffs and other government policies such as tax cuts still so uncertain, it’s a sign that the hard labor data were still robust less than one month before the announcement of Liberation Day tariffs.
- Nonfarm payrolls increased 228k (cons 140k), although a little over half of the 88k upside surprise was offset by downward revisions, mostly in February.
- The latest profile sees 228k after two weak months (111k Jan, 117k Feb) which in turn followed two booming months (261k Nov, 323k Dec).
- Payrolls increased an average monthly 152k in Q1, a slowdown from the 209k in Q4 but still above 133k in both Q3 and Q2. That’s impressive considering the slowdown in immigration, although the sharpest recent declines are unlikely to have taken full effect in today’s report.
- Private payrolls were also strong, at 209k after a similar pattern to total nonfarm. It sees a Q1 av of 135k after 177k in Q4, 94k in Q3 and 118k in Q2.
- The public sector remains in focus considering DOGE cuts, but they look small as was broadly expected. Overall government net job creation increased to 19k in March after a downward revised 1k (initial 11k). Federal government saw a decline of just -4k after -11k, but much larger declines are known to be in the pipeline with CNN tracking at 120k and yesterday’s Challenger report noting job cut announcements totaling 280k over Feb-Mar.
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US DATA: ADP Misses Along With Recent Downward Revisions
- ADP employment growth surprised lower in February with 77k (cons 140k).
- It followed a marginally upward revised 186k (initial 183k) in January but some more notable downward revisions before that including 161k in Dec (from 176k), 169k in Nov (from 204k) and 193k in Oct (from 221k).
- See the revisions in the charts below, with jobs growth generally revised higher in 1H24 before lower 2H24.
- As ever though, note the wide differences with private payrolls. In latest vintages for both release, ADP overshot private payrolls by 75k in Jan after undershooting by 112k in Dec and 75k in Nov.
- That important caveat aside, ADP Chief Economist Richardson writes: “Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month. Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”
- Within the details, small businesses appear to be under pressure, with a 17k decline in jobs for those with 1-19 employees. It’s the first decline since Dec 2023 and by its most since Mar 2022.
MNI: CANADA Q4 LABOR PRODUCTIVITY +0.6% QOQ
- MNI: CANADA Q4 LABOR PRODUCTIVITY +0.6% QOQ
- CANADA Q4 HOURLY COMPENSATION +0.8% QOQ
PIPELINE: Corporate Bond Roundup: Mars 8-Tranche Jumbo on Tap
As expected, Mars Inc, a family-owned, global leader in pet care, snacking and food, is looking to issue as much as $30B over 8 tranches today. The "jumbo" issuance is expected to help finance it's purchase of Kellanova, also a snacking/food related company for "$83.50 per share in cash, for a total consideration of $35.9B" back in August 2024. Estimates vary from $25B to $30B which would put it comfortably in the top ten largest corporate debt issuance on record.
- Date $MM Issuer (Priced *, Launch #)
- 03/05 $Benchmark Mars 2Y +75a, 3Y +85a, 5Y +100a, 7Y +110a, 10Y +120a, 20Y +135a, 30Y +145a, 40Y +155a
- 03/05 $1B KommuneKredit WNG 5Y SOFR+47a
- $7.8B Priced Tuesday, $36.1B/wk
- 03/04 $3B *KFW +3Y SOFR+29
- 03/04 $2.1B *Meiji Yasuda 30.25NC10.25 6.1%
- 03/04 $1.1B *3M $550M 5Y +80, $550M 10Y +95
- 03/04 $600M *OneMain Finance 7NC3 6.75%
- 03/04 $500M *First Horizon 6NC5 +153
- 03/04 $500M *VeriSign +7Y +125
