US private nonfarm payrolls in April are projected to increase by 204,000 (seasonally adjusted) over the previous month in tomorrow’s Labor Dept. report, based on The Capital Spectator’s average point forecast for several econometric estimates. The prediction represents a modest improvement over the previous month’s increase.
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It’s not terrible, but today’s updates on layoffs for April imply that growth is fading for the US labor market. Deciding if the deceleration will roll on–or give way to firmer numbers–is unknown at this point. Until or if upcoming releases bring deeper clarity, for good or ill, it’s still reasonable to assume that modest growth is the path of least resistance. But this morning’s numbers follow yesterday’s surprisingly weak profile of US private-sector payrolls via ADP’s estimate. The negative news is partly offset by upbeat survey reports for the US services sector for April. Nonetheless, the employment data isn’t moving in the right direction at the moment. Will tomorrow’s official job report for April tell us otherwise? Yes, according to the consensus forecast via Econoday.com. While we’re waiting for Friday’s news, let’s dig into the details on the latest figures for jobless claims and job cuts.
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Yesterday’s discouraging numbers on job growth in April via the ADP Employment Report raise doubts about a rebound in US growth for the second quarter. But if you’re looking for reasons to keep hope alive, Wednesday’s survey data for the services sector fits the bill.
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● ADP reports US private-sector job gains slowed in April | MarketWatch
● US ISM Non-Mfg Index climbs to 4-month high in April | Bloomberg
● PMI: US service sector growth in April accelerates to 3-mo high | Markit
● US factory orders rose modestly in March | AP
● US Productivity Fall in Q1 for 2nd straight quarter | Bloomberg
● US mortgage applications fell 3.4% last week | CNBC
● Survey based US Job Creation Index steady in Apr, near record high | Gallup
● China Services PMI growth slows to a crawl in April | Markit
● Global air passenger traffic slows in March | IATA

Employment growth at US companies slowed in April to the weakest gain in three years, according to this morning’s update from ADP. The private sector added only 156,000 positions to payrolls last month in seasonally adjusted terms—well below expectations for a gain of nearly 200,000. Today’s data raises new questions about expectations for a second-quarter rebound in economic activity following the weak Q1 GDP report. The numbers du jour also revive the focus on a question I asked last week: Will Job Growth Kill The Bear-Market Signal For Stocks?
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Vanguard founder John Bogle gave a powerful speech last month at the Q Group’s Spring Seminar that lays out the case (again) for favoring basic indexing and shunning complexity in matters of portfolio design and management. As Morningstar’s John Rekenthaler points out, Bogle wields the weapon of “basic math” with devastating effect on the expectations of investment managers who aspire to rocket science in the pursuit of performance glory. Anyone who’s familiar with Bogle’s long-running advice to keep it simple and favor plain-vanilla index funds will find the usual red meat here. Nonetheless, the latest sermon from one of index investing’s founding fathers makes for awkward reading for those inclined to challenge the great man. As a sample, consider the following excerpts from last month’s oration on “David and Goliath: Who Wins The Quantitative Battle?”:
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● US auto sales recover in April | MarketWatch
● Redbook: US retail sales growth edges lower in last week of Apr | TradingEco
● European Commission trims growth forecast | IBT
● Revised PMI Composite for Eurozone signals slow growth in Apr | Markit
● Global mfg remains in slow growth gear during April | Markit
● Atlanta Fed President encouraged by employment data | MNI
● Trump Becomes Presumptive Rep Nominee as Cruz Exits Race | Bloomberg
● How Slow Growth Could Thwart a Clinton Presidency | Fiscal Times

Private nonfarm payrolls in the US are projected to increase by 196,000 (seasonally adjusted) in April over the previous month in tomorrow’s update of the ADP Employment Report, based on The Capital Spectator’s average point forecast for several econometric estimates. The average projection reflects a fractionally lower gain vs. the previous month’s robust increase.
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Correction: Please note the correction in the data table below, as of 5/5/2016. An earlier version of the table used incorrect asset class labels in the far left-hand corner. The data was correct but mis-identified. The labeling has been corrected. Apologies. –JP

The expected risk premium for the Global Market Index (GMI) increased for the second straight month in April, rising to the highest level since last November. GMI—an unmanaged market-value weighted mix of the major asset classes—is projected to earn an annualized 3.3% over the “risk free” rate in the long term–moderately above last month’s estimate. (For details on the equilibrium-based methodology that’s used to generate the forecasts each month, see the summary below.)
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● US ISM Mfg Index stays positive, but just barely in Apr | Reuters
● PMI: US mfg output close to stagnation in Apr | Markit
● US construction spending +0.3% in Mar–highest level in over 8 years | AP
● US Consumer Spending Increases in Apr, according to survey | Gallup
● US GDPNow forecast for Q2 GDP: +1.8% | Atlanta Fed
● China’s Caixin manufacturing PMI slips again in Apr | MarketWatch
● Reserve Bank of Australia cuts cash rate to fight deflation | Financial Review