Morning Report: Job growth disappoints

Posted on March 5, 2025 by Brent Nyitray

Vital Statistics:

Stocks are flattish this morning after the ADP jobs report came in light. Bonds and MBS are down small.

The private sector added 77,000 jobs in February, according to the ADP Employment Report. The consensus was for 162,000 jobs, so this is a sizeable miss. “Policy uncertainty and a slowdown in consumer spending might have led to layoffs or a slowdown in hiring last month,” said Nela Richardson, chief economist, ADP. “Our data, combined with other recent indicators, suggests a hiring hesitancy among employers as they assess the economic climate ahead.”

Pay increased 4.7% for job stayers. ADP looks at private payrolls, not total, so it would correspond to the 143,000 expectation for Friday’s jobs report. Friday’s jobs report could miss substantially on the back of DOGE and government workers / contractors being let go.

Mortgage applications rose 20% last week as purchases rose 9% and refis increased 37%. The 30 year fixed rate mortgage declined from 6.88% to 6.73%.

“Mortgage rates declined last week on souring consumer sentiment regarding the economy and increasing uncertainty over the impact of new tariffs levied on imported goods into the U.S.,” said Joel Kan, an MBA economist, in a release. “Those factors resulted in the largest weekly decline in the 30-year fixed rate since November 2024. This is a period where we typically see purchase activity ramp up and purchase applications were up over the week and co

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