DATA DIVERGENCE

Private sector October employment rose 42,000, the first rise since July, but the data remains troubling. Healthcare/education added 26,000, and trade/transportation/utilities added 47,000, both non-cyclical sectors with little discretionary spending. But professional/business lost 15,000, and leisure/hospitality shed 6,000, both highly discretionary sectors, and both saw job losses for the third straight month. This speaks to fading momentum in consumer cyclicals, which has been the post-Covid driving force of the economy.