Favorable August PCE inflation data and a stronger-than-expected September ADP private-sector payrolls report flipped flattish pre-market trading into the green, with the Dow up 116 points, the S&P 500 up 20 points, Nasdaq up 71 points and the small-cap Russell 2000 up 9 points. Headline PCE matched the expected +0.3% month over month and came in at +3.4% year over year, 30 basis points below projections, while Core PCE rose +0.2% month over month versus +0.3% expected and +3.0% year over year, another 30 basis points below estimates and the lowest PCE inflation reading since February. ADP private-sector payrolls for September more than doubled expectations at +90K versus +68K consensus, the first up-month since May, following a downwardly revised +36K for August, with Goods adding +31K and Services +59K, medium-sized companies gaining +54K, and Education/Healthcare leading industries at +55K while Financial Activities lost 16K. Job Stayers averaged +3.0% year-over-year wage growth and Job Changers +4.8%, which ADP Chief Economist Nela Richardson called "a strong report" after "job creation rebounded and pay growth remained solid." The data likely gives the Fed a pass from raising interest rates in October, which accounts for much of the pre-market move higher.
Automatic Data Processing IncADP's own September private-sector payrolls report more than doubled expectations at +90K, a strong result for its payroll-services business.
