KEY DATA: ADP: +147,00; Construction: -15,000/ HWOL: -93,800

IN A NUTSHELL: “Moderate job gains and softening demand point to a tight but stable labor market.”

WHAT IT MEANS: Workers and the Fed Chair have been waiting for the time when the labor market gets so tight that firms have not choice but to raise rates faster. That time may not be here just yet as job growth looks like it is continuing along at a moderate pace but job demand may be softening. On the hiring side, ADP estimates that October private sector job gains were decent even if they were less than the previous few months. Critically, payroll cuts in construction greatly constrained hiring activity. On the other hand, service sector firms, led by financial, professional and business service companies, added workers quite solidly. Small business job creation was disappointing but large firms picked up the pace.

Looking down the road, job growth may not accelerate anything soon. The Conference Board’s Help Wanted OnLine measure dropped sharply in September after having been flat in August. Since peaking in May 2015, the number of ads posted online have decline by about 13%. Why that is happening is anyone’s guess, but mine is that firms may be so frustrated with their inability to fine suitable candidates they are not wasting time advertising. Don’t forget, job openings are near record highs. If it is frustration not a lack of demand that is causing the fall in advertising, the decline doesn’t signal any significant reduction in hiring.

MARKETS AND FED POLICY IMPLICATIONS: Friday we get the government’s reading on October job gains and if you believe ADP’s estimate of private sector increases, it should be decent. Of course, I have to define decent. With the reserve army of the unemployed and frustrated depleted and the ability of firms to find qualified workers limited, anything in the 150,000 to 175,000 would be good. That level brings people off the bench to look for work, though whether they have the skills to get the available jobs is not clear. It also is enough to slowly reduce the unemployment rate. For the Fed, that type of number would be just fine if the desire is to raise rates sometime soon. The members understand that there just aren’t enough workers around to generate robust job gains. They will settle for good enough. On Friday, watch the education and manufacturing sectors carefully. Changing school calendars have messed up the seasonal adjustments and we have been getting some outsized changes in government education. Recent manufacturing surveys, including today’s ADP and yesterday’s ISM reports seem to hint at a stabilizing manufacturing workforce. That sector has been shedding workers like crazy. In other words, it’s the details not the headline numbers that matter, unless you are a political operative. They already have their talking points written and it matters not what the numbers actually indicate.