US Has a Stagnant Labor Market, ADP's Richardson Says

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00:00So was it as bad as it looked yesterday? I mean that's really what people want to know. This all

00:03sounds very complicated and it sounds like you know there are a lot of things at play but the

00:07granular data, does it display the same kind of negativity that the bond market took notice of

00:13yesterday? Yeah it does. This is our best estimate of what hiring was in September, negative 32,000.

00:20That is our best estimate. It is our most robust estimate. It's rigorous. It's tied to the QCW.

00:26So no you don't need to dismiss the number. Now if you look at the series we don't fully

00:32re-benchmark the year until February with the January release but that September number is the

00:38number. So what it tells you even if you look at the pre-benchmarked series which I did of course

00:44you see the same trend and this is what I want to underscore to your audience because the takeaway

00:49is qualitative and the takeaway is firm, validated. That hiring momentum has slowed since the beginning

00:56of the year to a point where it is a weak labor market in terms of hiring. It is not a weak labor

01:02market in terms of layoffs. Very important to hold these two ideas together. The stock of the labor

01:10market is strong. The flow into the labor market is weak. The flow out of the labor market is weak.

01:16So is the market breaking or is it just an ongoing stagnation of the low fire low hire that still

01:22has not broken in one way or another? We have a stagnant labor market and all of that consumer

01:27spending that fueled Q2, a 3.8 percent growth rate we just saw, was built on the backs of the labor

01:35market because the labor market is supporting the consumer. So in that way it's strength. But that

01:41strength is not strong enough in terms of consumer spending to create new jobs. That's a different

01:48level of economic productivity that we still need to see in the economy that's missing the dynamism

01:54that leads to consistent job creation. We don't have it in the September number.