SPX: S&P 500 Drifts Lower by 0.3% as Private Jobs Data Jolts Stocks Before NFP Report

Analysts didn’t get it right again — private jobs increased by way less than expected in August. And that was bad news ahead of the major jobs report today.

• The S&P 500 stock index closed down 0.3% on Thursday, wrapping up its third straight day of losses as investors have been feeling less confident to bet on risk assets ahead of the jobs report for August. Adding to the investor anxiety, private sector job growth, according to ADP, rose by 99,000 last month. That’s way below the 141,000 expected by economists.
• The disappointing number fanned some recession fears but also made the outlook for the wider jobs report gloomy. The highly-anticipated August nonfarm payrolls (NFPs) are slated for release today. Last month’s painful data showed just 114,000 new jobs added by US employers — nowhere near the 174,000 eyeballed by analysts. For this one, Wall Street forecasts 164,000 new hires. But what if they don’t get it?
• Things may get ugly — again. When the dire July jobs data dropped, markets screamed. Another huge swing and miss might prompt the Federal Reserve to consider lowering interest rates by more than the consensus call of 25bps. Instead, a jumbo-sized 50bps might be introduced to douse out the dumpster fire and allow the economy to breathe with easier borrowing conditions for consumers and businesses.