Private sector payrolls, demand component and wages


Ahead of the actual data to be released on Friday, we observe an increase of 692K in the ADP employment change, above the market expectation of 600K. Small enterprises added 215K, medium-sized enterprises added 236K and large enterprises added 240K, which can be considered positive in terms of showing a homogeneous employment growth distribution. We would like to remind you of Powell’s emphasis on equal recovery in employment. While large firms were more capable of returning employment, small and local firms had difficulties because their financial situation was less sustainable and their ability to rollover fixed costs was lower than larger firms. The most important problem in this is the rental costs, which we will touch on the warming effect in the real estate market at the end of the article. There is a 68K increase in the production of goods and a 624K increase in the production of services, which is important as the service sector enters the game in the recovery in employment. In terms of the area it covers in the economy, the recovery in service plays an important role in the return from the crisis.

There is an estimate of 700K for NFP on Friday, while wage inflation is expected to grow by 0.4% monthly and 3.6% annually. The improvement in wages is critical in terms of its demand contribution to the economy. It is necessary to attach importance to individuals in terms of gaining sustainable spending ability and returning more qualified employment, since the center of gravity of policies is currently determined by inflation, sustainability in incomes is also a criterion. The Fed will pay attention to all of these elements and try to gauge the warming effect. Tapering still has the potential to be timed ahead.

Housing price indicators from different parts of the world continue to show that the market is warming up. Following the UK, data from the USA also showed that the rapid increases in housing prices continued. The organic process of getting out of the crisis… Individuals start to earn money and increase demand by taking advantage of low mortgage rates, and prices rise as a result. The desire to move to a detached house in the pandemic, etc. adds to that…

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