US payrolls rose less than expected in September, according to this morning’s release of the ADP Employment Report. Private-sector jobs increased by a seasonally adjusted 152,000 last month, moderately below Econoday.com’s 170,000 consensus forecast and well below the 175,000 gain in August, based on ADP’s numbers. The softer rise, which left the year-over-year gain for payrolls at a three-year low, raises questions about expectations for a rebound in growth in the government’s labor market report for September that’s scheduled for this Friday.
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The 10-year Treasury Note’s term premium (an estimate of the extra compensation that the market demands for holding longer rather than shorter maturities) has been moderately negative for most of 2016, and there’s no sign that the red ink will fade any time soon. The sub-zero readings, based on New York Fed data, aren’t surprising in the current economic climate. The appetite for safe havens remains strong, largely because growth is expected to remain modest at best—in the US and around the world. But as the term premium ticks lower, the slide suggests that the bond market is moving deeper into uncharted territory.
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