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David Becker
E-mini S&P 500 Index

US stocks rallied on Thursday as news that the US and China were planning to restart trade meetings in October buoyed sentiment. In addition, payroll numbers reported by ADP showed that private-sector jobs were stronger than expected. Retail sales surged, as the consumer appears to remain resilient. Most sectors were higher, led by cyclical and technology. Utilities bucked the trend.  The better than expected jobs data lifted US yields which helped buoy the dollar and weighed on precious metals prices. Gold mining shares were also under pressure. Crude oil prices were nearly unchanged after attempting to rally. Energy shares were buoyed rising near 2.3%.

ADP Private Payrolls Rose More than Expected

According to ADP and macroeconomic advisors, private payrolls surged by 195,000 in August, above expectations. Economists surveyed had been looking for a gain of just 140,000 following July’s 142,000, which was reduced downward by 14,000 from the original count. August’s growth was the best showing since the 255,000 added in April. Most of the gains were in the service sector with nearly 100,000 of the new jobs coming in education and health services and leisure and hospitality industries.

Services accounted for 184,000 of the totals, with goods-producing industries adding 11,000. Manufacturing grew by 8,000 and construction contributed 6,000, though natural resources and mining saw a reduction of 2,000. Information services saw a loss of 6,000 jobs.


Jobless Claims Expected Higher

Initial jobless claims increased 1,000 to a 217,000 for the week ended August 31, according to the Labor Department. Data for the prior week was revised to show 1,000 more applications received than previously reported. Expectations were for claims to be unchanged at 215,000 in the latest week. The four-week moving average of initial claims, rose 1,500 to 216,250 last week.

US Productivity Rises

US worker productivity slowed in the Q2, as productivity in the manufacturing sector declined by the most in nearly two years. The Labor Department said nonfarm productivity, increased by 2.3% annualized rate in the last quarter. Productivity also rose at an unrevised 3.5% rate in the first quarter. Economists had expected second-quarter productivity would be revised down to a 2.2% rate. Manufacturing productivity fell at a 2.2% rate in the second quarter, instead of the 1.6% pace estimated last month. That was the weakest since the third quarter of 2017 and followed a 1.2% pace of increase in the first three months of the year.

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