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Coffee With Greta: Private Job Growth Runs Hot


DJIA Futures: +36 (+0.1%)

SPX Futures: +5 (+0.1%)

NASDAQ Futures: +22 (+0.2%)

Good morning friends!

Futures are slightly higher as traders digest the latest jobs data and await day 2 of the Fed Chair’s testimony in Congress.

Let’s get right to it!

Private Payroll Growth Runs Hot

The U.S. private sector expanded more than expected in February as the labor market remains hot. 

ADP reported private employers added 242,000 jobs last month vs 205,000 expected. 

That was up from 119,000 in January. 

The leisure and hospitality sector continued to lead the gains, adding 83,000 jobs. 

Financial activities added 62,000 and manufacturing grew by 43,000.

This is the first piece of key data on the labor market this week. 

The Labor Department will release its January job openings and labor turnover survey (JOLTS) at 10:00 a.m. ET today. 

That report is expected to show the number of job openings in the U.S. fell to 10.6 million at the start of the year. 

The Labor Department’s official February jobs report on Friday is expected to show the U.S. economy added 225,000 jobs with the unemployment rate unchanged at 3.4%. 

Powell Testimony Day 2

Fed Chair Jerome Powell will testify in the House Financial Services Committee today, starting at 10:00 a.m. ET. 

This is the second part of his semiannual report on monetary policy to Congress. 

Powell shocked the market with a more hawkish tone during his testimony in the Senate Banking Committee on Tuesday. 

He told the committee that interest rates are likely to settle higher than the terminal rate the bank previously laid out. 

Powell said the Fed “would be prepared to increase the pace of rate hikes” if data shows that is necessary. 

CME Group’s FedWatch Tool now shows over 79% of traders expecting the Fed to go back to a 50 basis point rate hike at the March 22nd meeting. 

January Trade Deficit Rises Slightly

The U.S. trade deficit rose slightly in January after surging throughout 2022. 

The Commerce Department reported the gap rose 1.6% to $68.3 billion at the start of the year. 

That was in line with expectations and down 28% year over year from $87.4 billion in January 2022.

Imports rose 3% to $325.8 billion while exports rose 3.4% to $257.5 billion. 

Economists expect the deficit may decline this year for the first time since 2019 as Americans pullback on spending due to inflation and higher interest rates. 

Slower spending results in lower import levels.

In Case You Missed It

  • JetBlue Airways (JBLU) shares fell 2.9% on Tuesday after the DOJ sued to block the company’s takeover of Spirit Airlines (SAVE). The Justice Department claimed the merger would eliminate competition in the marketplace. The DOJ filing said the takeover would “leave tens of millions of travelers to face higher fares and fewer options.” Shares of the other major airlines rose following that filing. 

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