Today's Economic Data Highlights
Payroll day…and also nonmanfucturing ISM and factory orders. Today's 6th of the week POMO will buy $6-8 billion of bonds due 2013-2014. Lastly, and unrelated, Julian Assange is likely to be arrested any minute.
8:30: Employment report for Nov…more jobs, but sticky unemployment. Expectations for this report have improved substantially relative to recent reports, revealing that momentum plays a significant role in these forecasts. We estimate that nonfarm payrolls rose 125,000 overall; while we have no formal estimate for private-sector hiring, the median forecast—65,000 above the ADP forecast—is not an unreasonable guess given the potential for state and local jobs to shrink. (Census takers are no longer an issue.) If these figures are replicated in the household measure of employment and if we get a “normal” increase in the labor force—two very big ifs—then the jobless rate should stay put at 9.6%. These uncertainties are much more important than the rounding issues some have raised recently, though at 9.644% in October the unemployment rate does start from a “high” 9.6%. We continue to look for average hourly earnings to rise 0.1%, but would readily concede that this forecast is a lot better estimate for the average gain over a stretch of time than it is for any given report. Over the past 12 months, for example, this crude measure of wages has risen 1.7%, or 0.14% on average, but only three of those increases has actually rounded to 0.1%.
On total payrolls, GS: +125k; median forecast (of 87): +150k, ranging from +75k to +200k; last +151k.
On private-sector payrolls, GS: no formal estimate; median forecast (of 48): +158k, ranging from +115k to +200k.
On unemployment, GS 9.6%; median forecast (of 83): 9.6%, ranging from 9.4% to 9.7%; last 9.6%.
GS +0.1%; median forecast (of 58): +0.2%, ranging from +0.1% to +0.3%; last: +0.2%.
10:00: ISM nonmfg index for Nov…will it improve? This index has been running below its manufacturing cousin throughout the recovery, which is actually fairly unusual for the relationship between the two. Most economists expect an increase this month, but only one of the 76 reporting in to Bloomberg expect the gap to reverse.
GS: 55; median forecast (of 76): 54.8, ranging from 52.3 to 59.4; last 54.3.
10:00: Factory orders for Oct….a setback. It would take a huge (3.1%) increase in bookings for nondurable goods or a big revision in -3.3% already reported for durable goods to avoid a decline in factory orders. Inventories probably increased at a slower pace than the 0.8% reported for September; in durable goods the increase was only 0.4%.
GS: -1.5%; median forecast (of 69) -1.2%, ranging from -2.5% to +1.0%; last +2.1%.
11:00: POMO... $6-8 Blilion in bonds maturiing 2013-2014. At the last such POMO Brian Sack bought back some of the 3 Year auctioned off on November 8. Will it be bought back again or will it be on the list of exclusions?
Compiled by Goldman and Zero Hedge
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