QUICK QUILL — Yesterday’s backup in Treasury yields was highlighted by the largest monthly gain in current NFIB prices and an upside surprise in JOLTS job openings. Details in these reports and others from national payroll providers, however, suggest small business optimism to expand has faded and that private core job losses on Main Street and elsewhere across the economy have accelerated. The Fed should adopt a dovish cut stance at today’s FOMC meeting. If realized, expect a level shift down in the Treasury curve.
TAKEAWAYS
- NFIB Raising Current Prices jumped 13 points to a net 34% in November, a record one-month increase and the highest level since March 2023; that being said, demand is not driving price increases, given Good Time to Expand was a weak net 13%, level with past downturns
- ADP Small Business Private Payrolls fell by 120,000 in November, five times the -24,000 average over the prior six months; Paychex’s Small Business Jobs Index concurs, contracting for a seventh month in November with Education/Healthcare the main growth driver
- The Private Core Hires-Separations spread totaled -181,000 over the five months ended October; the result suggests further downward revisions for private core NFPs from their 5-month decline of 90,000 and reinforces that January rate cut probability is underpriced