Lots of breaking economic news today, but one that should resonate is the January Trade Balance, which saw a deficit of -$56.6 billion, which is worse than expected. I know this is "great" news, but it must turn soon or will derail overall 1Q 2018 GDP.  I’m being facetious of course, there is a point when a lot of cheap plastic goods and metals have a negative impact.

• Imports unchanged $157.5 billion
• Exports -1.3% (goods -2.2%) $200.9 billion

The market was rebounding after opening lower and even shook off a report the tariffs would become official tomorrow.  Then rumors began circulating there would be more items added to the list beyond industrial metals.

I don’t think that’s the case, but the street is concerned. 

On that note, the underlying data outside of trade looks remarkable.  Meanwhile, make sure to read our Special Report Trade War Report and the facts on tariffs.  Click here.

The ADP jobs report was a real bonanza, adding 235,000 jobs versus consensus of 193,000.  January was revised up 10,000 to 244,000.  Tax cuts and additional government spending should continue to support job growth in the near term.   ADP Research Institute vice president, Ahu Yildirmaz, commented that “The labor market continues to experience uninterrupted growth.”  

Midsize companies, those employing 50-499 people, experienced the largest growth.  Leisure and hospitality lead the way adding 50,000 jobs in February.  This is in addition to 46,000 jobs in January and 28,000 in December 2017.

Goods-producing Sector 37,000

• Natural Resources & Mining 2,000
• Construction 21,000
• Manufacturing 14,000

 Service-providing Sector 198,000

• Trade, Transportation & Utilities 44,000
• Information -1,000
• Financial Activities 9,000
• Professional & Business 46,000
• Education & Health 43,000
• Leisure & Hospitality 50,000
• Other Services 7,000

This report bodes well for Nonfarm payrolls, which set for release Friday at 8:30 am.  The consensus is for an increase of 210,000 job, and the highly anticipated average hourly earnings is expected to come in at 0.2%.  This number will be key as last month wages derailed the rally.

Over the last 12 months, average hourly earnings have increased 2.9%, versus 2.7% for the 12 months ending in December.