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All Eye On Jobs Data & OPEC

The main beacon signaling the U.S. jobs report the first Friday of almost every month is the ADP ADP private sector employment report which comes out nearly every Wednesday, including this morning. A positive surprise of 46K to the upside — 216K overall — easily topped expectations of 170K for the month of November. For October, revisions were marked down substantially, from 147K to 119K.

Goods-producing jobs fell last month by 11K in the private sector, while services was up a whopping 228K. Some of this may be seasonal, as the holiday season can be relied upon to employ many temporary workers at retail and delivery companies, but consider this read is for November, not December, and one might get the sense companies are expecting a strong Christmas, Hanukkah, et. al. in 2016.

Large firms (more than 500 employees) led the way with 90K new jobs in November, followed by Medium-sized firms (50-499 workers) at 89K and Smaller companies +37K. And while Manufacturing and Information sectors were each down 10K, Leisure & Hospitality led the hiring surge with 38K new jobs, Healthcare +25K and Education +18K.

Market futures were left pretty much unchanged following the news: we’re up modestly ahead of today’s open on the S&P 500, Dow Jones and Nasdaq indices. For now, Friday’s non-farm payroll outlook is constant at 180K jobs expected. It’s possible we may see this ratcheted up a bit as analysts sift through this morning’s data.

We’d been following the story of the OPEC meeting this week, and here’s another positive surprise this morning: the consortium of top Middle Eastern oil-producing companies has indeed reached an agreement to cut overall production. Referred to as the Algiers Plan, it’s an agreement seeking a cut of 1.2 million barrels per day. Importantly, Iran has been granted a waiver from near-term production cuts or freeze.

As a result, both WTI and Brent indices have shot up 7% or more in today’s pre-market. This is the shot in the arm the oil industry had been looking for, and one that looked a bit shaky yesterday with oil price futures falling back. Now both WTI and Brent are pushing back towards $50 per barrel oil, and that’s a real money-maker.

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