Private sector payrolls increased 218,000 in July, according to this morning’s ADP Employment Report. The rise fell short of most expectations and well below June’s 281,000 surge, but the latest advance marks the fourth straight monthly 200,000-plus gain. While some analysts will obsess over the deceleration in the monthly comparison, it’s worth pointing out that the year-over-year change in the ADP jobs data inched higher to a 2.15% increase—the fastest annual pace since August 2012. In other words, the broad trend for payrolls continues to hold to a moderately strong rate of growth–with a slight bias to the upside in the latest numbers.
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A funny thing happened on the way to higher interest rates: yields took a surprising turn lower. The 10-year Treasury yield yesterday dipped under 2.47%, near the lowest level since a swoon in late-May pushed this benchmark rate to an intraday low of roughly 2.40% at one point. There are several explanations making the rounds for the current decline in the price of money: Rising anxiety over escalating tensions with the Russia-Ukraine crisis by way of a new phase of US and European sanctions; worries that the Eurozone’s feeble recovery is deteriorating again; concerns that the US economy’s housing sector is in trouble, perhaps with ramifications for the broader economy down the road. Whatever the cause, the crowd’s appetite for bonds is on the rise again.
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