Update

Even now, forecasters continue to under-estimate vigor in payrolls, and thus spending.

Driving forward with one’s eyes in the rear-view mirror is rarely productive.

Today’s ADP (Auto. Data Processing Inc.) private payroll survey for Dec rose 297M vs a consensus expectation for 100M. Although private sector employment is still 7.515MM below its Jan/08 peak, it is now 765M above the Jan/10 low, something which has baffled forecasters but fits our anchor very nicely.

Friday (Jan/7) we will have the Dec BLS payroll report. Since this report includes public workers, many of whom were cut at local and state levels, the headline number will not be as buoyant but private sector growth should be strong. The following Friday we will see Dec Retail Sales. We can expect this result to also adhere to our anchor, that is, broaching expectations.


Robert Craven