ADP's Richardson Sees Recovery in Jobs Market

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00:00Are we seeing some stabilisation, finally, on a serious note?

00:03Yeah, I think we are.

00:05Going into the numbers that we put out in September, where we saw that big job loss,

00:11the question was, when you looked at the GDP in the second quarter, which was strong,

00:15was this a trough? I think you might have asked that question, Lisa.

00:19And so, going out of this last few weeks, we've seen that it looks like it was a short-lived

00:25negative impact on the payrolls, and we're seeing a recovery, but it's tepid, it's slow,

00:32it's weaker than what we saw in terms of hiring momentum earlier this year.

00:36So, cautious optimism, a bit of a rebound, but not a full-blown restoration of robust job gains.

00:44So, does what you're seeing completely contradict the tone of the challenger data that we got out this morning?

00:50Well, it's all about timing, right?

00:52This is a fast-moving, very complex labour market, and we've seen some big headline announcements.

00:59Now, these big companies don't drive all the hiring in the U.S.

01:03In fact, the companies are only accounting for a quarter of employment in the U.S. or less.

01:08So, it's really small firms that we need to pay more attention to,

01:12because most U.S. workers work for small firms.

01:15That being said, announcements eventually trickle into the labour market as cuts,

01:21whether through attrition or through outright layoffs.

01:24We're not seeing it yet, but it's an early warning signal.

01:27Where is the hiring coming from?

01:29We saw the services sector also still in contraction for the employment sector.

01:33We saw the same thing for manufacturing.

01:35Where is it actually coming from?

01:37Well, we're seeing in trade transportation and utilities.

01:41That's great.

01:42And healthcare.

01:43Healthcare is now the new staller.

01:45It is strong because it is acyclical.

01:48It is not affected by interest rates.

01:50It's affected by this long-moving trend that no policy can change.

01:55Father time.

01:56We are getting older, and this aging population is going to require healthcare.

02:01And you're seeing that as a job gainer in the data,

02:05and I think that will be consistent going forward.

02:07Where we're not seeing it, at least we didn't see it at ADP in October,

02:11is in leisure and hospitality.

02:13And that's what I'm worried about because this labour market,

02:16this economy has been fuelled by consumer resilience,

02:19and they're not as resilient, at least in the hiring numbers in that sector,

02:24as they have been previously.

02:26That's a concern.