ADP

The ADP report showed a private sector jobs loss of 371k, not far statistically speaking from the loss of 350k the consensus was looking for. It follows on the heels of a softer Challenger report as well. There had been some risk of a stronger than expected number due to the distortions picked up by the weekly initial jobless claims data. Although exact details are not immediately available, the fact the distortions do not seem to have impacted the ADP data may boost confidence in this report and continue recent pattern where it takes some of the limelight from the government's monthly report. Still the market's estimate for Friday's non-farm payrolls is unlikely to change very much from the -325k-350k the market is looking for. There does not appear to be a significant market impact from the modest disappointment, suggesting that it takes more than a little disappointment to derail current trends. Separately we note that the Fed funds futures are moving to discount a rate hike in January, which we think is premature.