For those hoping for another Fed rate cut but not a recession, today’s ADP Jobs number was just what you wanted.

The report, compiled by forecasting firm Macroeconomic Advisers using ADP’s payroll data covering some 23 million workers, estimates that nonfarm private employment rose 58,000 in September. If government payrolls grew by 22,000 during the month (the monthly average for the year through June), the Labor Department’s Friday report would show a September gain of about 80,000 jobs, the report said. this would be ion par with the 100,000 number economists had expected at the beginning of the month.

That is basically the increase economists expected in August, when payrolls stunned people when they dropped by 4,000 and raised fears of a recession. The September reading “confirms the recent deceleration of employment,” ADP said in its report.

Manufacturing employment dropped by 22,000 jobs, and housing-related sectors took a hit: Construction employment fell by 20,000 and financial-activities sector employment declined by 7,000 as mortgage layoffs continued.

Why is this perfect? Another negative report (job losses) would suggested a recession was either imminent or underway. A “weak” report shows the economy is still growing, albeit at a slower pace. Since inflation is still under control, this sets up a perfect situation for the Fed to lower rates to spur growth. For investors it is good because we now are not so concerned about a recession and earnings collapsing but anticipate a brief pause and then another acceleration as the rate cuts make their way through the system.

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