(Bloomberg) --
Investors seized on the positive news within mixed U.S. labor-market data Thursday, days after weak manufacturing figures stoked recession fears.
ADP Research Institute figures showed U.S. employers added the most jobs in four months, topping expectations, and the Labor Department said weekly filings for unemployment benefits were little changed. In contrast, a measure of service-industry employment was the weakest in more than two years and a separate report said companies announced plans to eliminate more than 10,000 jobs because of “trade difficulties.”
While the data gave a mixed picture of the U.S. labor market a day before the August jobs report, it also came on the heels of news that the U.S. and China would hold face-to-face negotiations aimed at ending their tariff war.
Traders widely saw the combination as reason for optimism about the economy. U.S. stocks surged Thursday, bringing the S&P 500 within 2% of an all-time high. Tech shares led the gain and banks rallied as the two-year Treasury yields headed for the biggest rise since February 2015.
The Labor Department's monthly employment report, due Friday morning in Washington, will provide a more definitive take.
Analysts expect a monthly non-farm payroll increase of 160,000, in line with July. While the jobless rate probably held near a half-century low, wage gains likely cooled.
Read more: Canaries in U.S. Jobs Market Warn of Possible Weakness Ahead
President Donald Trump tweeted “Really Good Jobs Numbers!” on Thursday morning following the ADP data. The president hadn't yet been briefed on the Labor Department's Friday figures, White House spokesman Judd Deere said. Those are typically sent to the White House on Thursday afternoon.
The Institute for Supply Management said its employment gauge for non-manufacturing industries fell in August to 53.1, the lowest level since March 2017. That signals service jobs are still growing but at a slower pace. The ISM's headline index of service industries topped expectations with the best reading in three months.
“The employment index can be both a leading and a lagging indicator,” Anthony Nieves, chair of the ISM non-manufacturing business survey committee, said on a call with reporters Thursday. Hiring can cool in the summer months and gear up again in the autumn as companies review their business pipeline, he said.
In another positive sign Thursday, the weekly Bloomberg Consumer Comfort Index bounced back to a five-week high as assessments of personal finances reached the second-highest level since 2000, offering hope American households can continue to fuel the economic expansion.
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--With assistance from Reade Pickert, Vince Golle and Jordan Fabian.
To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net
To contact the editors responsible for this story: Scott Lanman at slanman@bloomberg.net, Margaret Collins, Vince Golle
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