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Private payrolls declined in September by 32,000 in key ADP report coming amid shutdown data blackout

1. Private payrolls declined by 32,000 in September, marking a significant job loss. 2. Economic growth slowed, raising concerns about labor market health and consumer demand. 3. Federal Reserve may cut interest rates; ADP report gains significance amid government shutdown. 4. Job losses varied across sectors, notably affecting leisure and hospitality industries. 5. Wages increased 4.5% annually, although job-hunting wage growth slowed to 6.6%.

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FAQ

Why Bearish?

The substantial job losses and labor market weakening signal economic slowdown, which historically pressures equities, including the S&P 500. The last significant employment drop contributed to negative market sentiment in early 2020, leading to a recessionary phase.

How important is it?

The decline in private payrolls and implications for interest rates are crucial for S&P 500 performance, impacting investor sentiment and economic forecasts. Labor market health directly influences consumer spending and corporate profits, core elements of S&P 500 valuation.

Why Short Term?

Current labor market signs likely affect market confidence immediately, especially before Fed meetings. Quick shifts in employment data often result in rapid market reactions, as seen during the COVID-19 pandemic.

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