Wednesday February 2, 2022

// February 2nd, 2022 // Comments Off on Wednesday February 2, 2022 // Daily News

Companies unexpectedly cut 301,000 jobs in January as omicron slams labor market, ADP says

• Private payrolls fell by 301,000 for January versus the estimate for a 200,000 gain, according to payrolls processing firm ADP.
• This was the first reported net job less since December 2020 and came as surging omicron cases hit hiring.
• The pandemic-sensitive leisure and hospitality industry was the hardest hit, losing 154,000 jobs.

WATCH NOWVIDEO03:43ADP: Private payrolls cut 301,000 jobs in January, first monthly loss since 2020

Companies cut jobs in January for the first time in more than a year as the spread of the Covid omicron variant appeared to hit hiring, payroll processing firm ADP reported Wednesday.

Private payrolls fell by 301,000 for the month, well below the Dow Jones estimate for growth of 200,000 and a marked plunge from the downwardly revised 776,000 gain in December. It was the first time ADP reported negative job growth since December 2020.

The pandemic-sensitive leisure and hospitality industry was responsible for more than half of the decline, as companies reported a drop of 154,000. Trade, transportation and utilities cut 62,000 while the other services category declined by 23,000.

Manufacturing also lost 21,000 positions, while education and health services reported a drawdown of 15,000 and construction fell by 10,000.

Service-providing industries were responsible for 274,000 of the job losses, with goods producers falling by 27,000.

“The labor market recovery took a step back at the start of 2022 due to the effect of the omicron variant and its significant, though likely temporary, impact to job growth,” ADP’s chief economist, Nela Richardson, said.

The ADP numbers come two days before the more closely watched nonfarm payrolls count from the Labor Department. Wall Street expects that report to show a gain of just 150,000 jobs, though economists and White House officials are warning the month’s numbers could be rough due to omicron and statistical effects from the way the Labor Department compiles the data.

While ADP’s report could signal a weak number Friday, the two counts can differ substantially. In December alone, ADP’s total — initially put at 807,000 before the revision — was well above the Bureau of Labor Statistics’ count of 211,000 for private payrolls and 199,000 for the total nonfarm number.

From a business-size standpoint, the job losses were concentrated at small firms, with companies employing fewer than 50 people seeing a drop of 144,000. Businesses with more than 500 employees lost 98,000, while medium-sized firms declined by 59,000.

Federal Reserve officials are watching the jobs numbers closely. Policymakers have said they think the U.S. economy is around full employment, and they have teed up a series of interest rate increases this year.

Tuesday Feb. 1, 2022

// February 1st, 2022 // Comments Off on Tuesday Feb. 1, 2022 // Daily News

Stocks slide to begin February after S&P 500’s worst month since March 2020

Stocks fell Tuesday, following a wild January on Wall Street that saw investors struggle with a Federal Reserve policy shift.

The Dow Jones Industrial Average fell 97 points, or 0.2%. The S&P 500 traded 0.4% lower, while the Nasdaq Composite lost 0.8%.

Shares of UPS jumped 13% after the shipping company beat earnings estimates and raised its quarterly dividend 49%. Its rival FedEx added 3%, despite suspending some services due to Covid.

Shares of Exxon Mobil gained more than 3% after the company reported better-than-expected quarterly earnings and revenue that jumped more than 80% year over year.

Tesla fell about 1% after the company issued a recall on about 53,000 cars with its self-driving software in the U.S.

The moves follow a two-day rally on Wall Street that ended a volatile month of trading.

Over the past several days, investors have stepped in to buy a dip that briefly knocked the S&P 500 into correction territory — down at least 10% from a recent high. The large-cap index is up more than 3% in the past week.

While stocks pulled off a tech-driven rally Monday — with the Nasdaq surging more than 3% — the major averages still suffered a brutal month marked by wild price swings. The blue-chip Dow slid 3.3% for the month. The S&P 500 and Nasdaq suffered their worst monthly declines since March 2020, falling 5.3% and 8.98%, respectively. It was also the S&P 500′s biggest January decline since 2009.

January’s sell-off came as the Fed signaled its readiness to tighten monetary policy, including raising interest rates multiple times this year, to tame inflation that has shot up to the highest level in nearly four decades, and reducing its balance sheet. Investors flocked out of growth-oriented technology shares, which are particularly sensitive to rising rates.

Volatility exploded as investors deciphered the Fed’s messaging on its policy pivot. At one point last week, the S&P 500 dipped into correction territory on an intraday basis. The recent comeback pushed the large-cap benchmark 6.3% below its peak. Meanwhile, the Nasdaq, which is weighted to tech names, is still in a correction, last down 12% from its all-time high.