Everywhere we look at the basics of financial market structure, its roots mimic the foundational concept in Chinese philosophy of Yin and Yang. Cautious Bears (Yin) and optimistic Bulls (Yang) describe the duality of rival forces that balance investment viewpoints at any given time. Every financial market transaction requires two opposing positions to occur simultaneously. The Buyer (Yang) deems the asset undervalued and anticipates it will rise in price; the Seller (Yin) exits, taking profits believing the same is overvalued and will sell off. Order book mechanics have their own Yin and Yang, which required interplay between the Bid, the highest price a buyer is prepared to pay, and the Ask, the lowest price a seller is willing to accept. And the fluidity of markets shows a constant shift between periods of quiet consolidation – Yin stability – and explosive price movements – Yang volatility. Not so profoundly, the dynamic equilibrium is captured by two concepts: 1) Risk balances Reward and 2) Fear balances Greed.
Yin and Yang are also manifest in the sport of high-frequency economic forecasting. Case in point is today’s U.S. nonfarm payrolls (NFP). Anchoring the 113,000-consensus figure is the 80,000 to 145,000 range that’s plus or minus one standard deviation from the mean. Only three estimates (one Yin at 25,000 and two Yangs of 180,000 and 200,000) comprise the two-standard deviation tails.
The consensus estimate (113,000) and whisper number (136,000) shifted to the left (from Tuesday’s 115,000 and 142,000, respectively) after Wednesday’s ADP June private employment figure came in lighter than expected (98,000 versus 120,000 consensus). ADP mentioned, “Job creation was uneven in June. Financial activities and information were among the gainers, while leisure and hospitality delivered a sixth month of weak hiring.” June’s 2,000 month-over-month (MoM) increase and the 4,000 six-month moving average were a mere 10% and 20% pie slices, respectively, of the 20,000 long-term leisure and hospitality job creation rate.
As if by osmosis, ADP’s waning trend for this industry captured the spirit of the Conference Board’s fading vacation intentions (see Wednesday’s Feather). When ADP’s record low six-month volatility (based off MoM gains between 1,000 and 8,000 from January to June) is added into the equation, it flags a new leg down in leisure and hospitality employment in the second half, echoing previous consolidation periods in 2023, 2024 and 2025. To that end, Lightcast’s weekly leisure and hospitality job postings eased back to -16.6% (below the January 2020 benchmark) in the week ended June 19th, and extended the streak of negativity to 11 weeks, the longest since late-2024.
Per ADP, underlying Private Core job growth was also modest last month. The 50,000 MoM advance followed April’s and May’s respective 44,000 and 65,000 MoM increases (teal line). In the context of ADP’s most recent performance, the string of double-digit gains was the best since 2025’s July to September period. But the pace was below that of the BLS’s official Private Core in recent months (lilac bars), leaning in the direction of either downward revisions to April and May (like JOLTS pointed to), a downside surprise in June or a combination of both once the numbers go public at 8:30 am ET today.
Meanwhile, Challenger’s job cut announcements channeled their best FDR. The latest month’s pink slips fell to 45,849, nearly half May’s 97,006 and 4.5% below June 2025’s 47,999. At face value, it would appear that consumers’ elevated Fewer Jobs expectations (fuchsia line) sounding more like FDR’s timeless line: “The only thing we have to fear is fear itself.” To that end, cyclically sensitive Private Core job cuts were 41,158, 6.7% above the year-ago 38,585 level (aqua bars). There is some truth to households’ fear illustrated in the persistence of the six-month moving average (yellow line) remaining above the long-term run rate for the last 18 months (dashed aqua line). For completeness, total Challenger hiring plans of 10,933 bettered last June’s 3,191, but remained below the 26,336 long-run average, continuing to fly yellow flags.
The same caution was evident in industrial labor, according to ISM and S&P Global. A fusion of their June Manufacturing Employment metrics (ISM 49.7, S&P Global 47.1) yielded a 48.4 average (purple line). After a brief poke into positivity in May to 50.1, the relapse extended the slump that’s been in place since late-2023. i.e., factories were not grabbing bodies even as they sourced more products. The S&P Global Manufacturing Quantity of Purchases index may have reached a crescendo from the 59.5 June Flash to the 56.3 Final (orange line). The fact that ISM’s Customers’ Inventories was little changed at 42.3 in June from 42.7 in May, and well above January’s low of 38.7, implies the strongest upstream stock building impulses could be behind us.
ADP’s modest underlying job gains, Challenger’s elevated core job cuts and ISM’s lackluster manufacturing hiring all wear the Yin tag to Revelio’s Yang. The alternative payroll source didn’t just blow the NFP consensus estimate out of the water, its 258,500 figure also came in above the 200,000 top end of the forecasting range (red line). Should NFP print on the high side to this extent, it would continue to build conviction for a Fed tightening at month’s end. To be sure, Revelio revisions to April (+9,000) and May (-13,000) were negligible, although May’s number did agree with the direction from the Hires-Separations spread.
The Yang parting shot is illustrated in the 12-month rolling correlation between Revelio NFP and BLS NFP (dark blue line). Since Revelio’s 2021 inception, this calculation could best be described as ‘meh,’ that is, until it began to liftoff in 2025’s second half. In the 12 months ended May, the .75 figure stands at a record high (green bars). If the tighter relationship becomes snugger today, then investors should feel tighter financial conditions, the Yin to Revelio’s Yang.