Distinctly mixed news from the US. Good news from the labour market front, with the ADP total of private payrolls rising 807k - that's up 5.2% yoy. The demographics are good too - small cos adding 204k, medium-sized 214k and large cos +389k. No real sign then either that large cos are pulling in their horns, or that smaller companies are finding it impossible to hire. A genuinely encouraging result, then, and one which helps offset yesterday's slightly disappointing JOLTS job openings number when openings fell 529k to 10.562mn. After all, if you've got hiring accelerating in the way ADP is reporting, you'd expect some of those openings to be getting filled.
If you remember what I was talking about yesterday, there's no more 'catch-up spending' to be expected, and domestic demand will depend therefore a lot on healthy labour markets. Which is what we have got.
On the other hand, the news from December's vehicle sales were truly dreadful: car sales fell 3.6% mom and fell 23.% yoy, with domestic producers down 3.8% whilst foreign makers rose 7.2%. Not much better for the light truck market - it fell 4.2% mom with domestic down 5.2% and foreign up 0.1%.
But the worst news came from the heavy truck market. The US is meant to be dealing with its supply-chain issues, and you'd think that this would absolutely mandate rising heavy truck sales. Not so: Dec's heavy truck sales fell 17.1% mom and fell 1.96.% yoy, with the total number sold the lowest since June 2020. What's more, November's sales were also revised down sharply. Why does this matter? Well, collapsing sales of heavy trucks have been early signals of approaching recession in each of the last four recessions since 1980, with no false signals either. So here's hoping that the weakness in Nov and Dec were merely end-of-year jitters. Definitely one to keep watching.
