U.S. adds 749k private payrolls in September, 'We're on the right track': Expert

Scott Bauer, Prosper Trading Academy CEO joins Yahoo Finance’s Kristin Myers to discuss the latest market action, as the U.S. economy adds 749,000 private payrolls in September.

Video Transcript

KRISTIN MYERS: So Scott, when we were talking just a moment ago, we were talking about that private payrolls number, and you know the way that the ADP number was not really a great indicator of what we were going to be seeing in the jobs report that we will be getting this Friday. So we did, of course, get a beat on those numbers-- 749,000 versus 649,000 expected. I'm wondering what you are expecting on Friday, if you are upbeat and optimistic for some of the figures they might be getting.

SCOTT BAUER: So the consensus is about an 850,000 plus gain-- great numbers, right? Great numbers, certainly not anywhere near where we were a couple of months ago when we got that $4 million gain. But even if we get that-- and again, I don't want to-- I don't mean to dampen the spirits here. That's a great thing. Even if we get that, that's still going to leave us almost 11 million jobs less than where we were pre-COVID.

So we're on the right track. However, that job growth is slowing down. It's slowing down considerably. And again, my caution is what's coming in the next few months. Are the lockdowns that we're starting to see going to roll out more? Are we going to get this second wave that many of the scientists and many of the frontline people have been suggesting for a very long time that we're going to get?

So it's going to be a very closely-watched number. It is the last monthly payroll number that we're going to get before the election. I hope it's 5 million. I mean, we all do. We all hope that the economy's getting back where it needs to be. I would absolutely err on the side of caution, though.

KRISTIN MYERS: So let's talk about what we're going to be getting over the next couple of months. While there is optimism over a stimulus deal, we do not yet have one. So folks are not getting the stimulus checks. They're not getting that unemployment enhancement.

We do have the holiday season coming up. Winter is coming, to quote "Game of Thrones." And businesses are talking about the struggles that they might be facing in the coming months. So how do you think the economic recovery is going to be going through to the end of the year, and how do you think investors are going to be reacting especially considering we have the elections coming up in just over a month?

SCOTT BAUER: I think it's going to be very tough. You know, obviously, the economy has done an incredible job coming back from the dire circumstances that we were in. I think it's going to be very tough over the next few months, going into the end of the year, maybe even through the first quarter. Look at, you know, all of the seasonal hiring that we normally have, which starts just about now going into the holiday season, that we're not going to have this year, right? Because stores are not open for the extended hours. They're not going to get the foot traffic that we normally do. So that's one big concern.

You know, on the other, you know, side of things economically here, without a stimulus package here, how many millions and millions of people now are not going to have that support? It doesn't take more than just to look at what Disney just announced or the airlines or unite-- you know, United Airlines just announced that without stimulus and without help, without support, there is going to be more and more people that are laid off, that are going to be furloughed. So I think that we're in for some real challenges over the next quarter or so, which obviously can change very, very quickly if we do get an effective vaccination. But I don't think that's happening, you know, unfortunately until at least the first quarter of next year.

So I think the rest of this year is going to be very challenging. However, if there is positive news coming out of that-- about a vaccination even if we don't get it until the first quarter of next year if we do get some of these trials that have, you know, passed through phase three and that we can be optimistic, then yes, that can be a humongous shot in the arm for the economy. However, in the near-term-- and I'm talking near-term, weeks, you know, before the election-- we do need another stimulus package.

KRISTIN MYERS: All right, we'll leave that there. Scott Bauer, CEO of Prosper Trading Academy, we'll have to bring you back on, and hopefully there will be no technical difficulties next time.

SCOTT BAUER: Yes.

KRISTIN MYERS: Thanks for joining us.