Weak ADP Jobs Report Fails to Dampen Fed Rate Hike Bets as Yields Hit 19-Month Highs

Private payrolls grew by just 38,000 in August, the slowest pace since January and below the 47,000 consensus estimate. The labor market is cooling, but not enough to stop the Fed's hawkish train.

Behind the Data

The ADP report revealed a lopsided job market. Gains were concentrated in education/health (+45,000), leisure/hospitality (+16,000), and construction (+12,000). Meanwhile, manufacturing shed 17,000 jobs and professional services lost 16,000....