Non Farm Payrolls
Irish citizens can invest in gold bullion in their pension funds since 2007
We are growing more concerned by the day by the actions of the central banks. It isn’t just that markets popped and dropped dramatically before and after Draghi’s rate cut, or that any policy seems particularly bad, just that the policies don’t seem to be working great, and are leaving a changed landscape that will need to be corrected, somehow, in the future. We are quite simply concerned that too much faith is being placed in untested theories that may or may not work, or may or may not even be correct.
What can be said? Rinse, repeat, rinse, repeat.
Everyone basking into the market truce provided by Super Mario. And taking some easy time off…
Friday afternoon Periphery squeeze barn stomp
Europe took August off. Today, it is America's turn, as the country celebrates Labor day, although judging by recent trends in the new 'Part-time" normal, a phenomenon we have been writing about for years, and which even the NYT has finally latched on to, it would appear the holiday should really be Labor Half-Day. After today the time for doing nothing is over, and with less than one month left in the quarter, and trading volumes running 30% below normal which would guarantee bank earnings in Q3 are absolutely abysmal, the financial system is in dire need of volume, i.e. volatility. Luckily, things are finally heating up as the newsflow (sorry but rumors, insinuations, innuendo, and empty promises will no longer cut it) out of various central banks soars, coupled with key elections first in the Netherlands and then of course, in the US, not to mention the whole debt-ceiling/ fiscal cliff 'thing' to follow before 2012 is over. So for those who still care about events and news, here is the most comprehensive summary of the key catalysts over the next week and month, which are merely an appetizer for even more volatile newsflow in October and into the end of the year.
Expectations were +100,000, NFP prints at 163,000K. Goodbye QE in 2012.
While Knight's algos will be focusing on the headline number and furiously calculating if [X AS PRINTED] is < or > than [X AS EXPECTED] and simplistically moving the market up or down accordingly, without regard for quality or compoisition (they don't call it the Part-Time Non Farm Payrolls for nothing), another key swing factor in July will be the seasonal adjustment. As a reminder, as the chart below shows, in July we experience a major swing event. While in June, seasonal factors typically subtract about 1 million from the headline non-seasonally adjusted headline number, in June we invert, and instead of subtracting, seasonal factors for the first time since April "add" jobs. 295,000 (past decade average) to be exact. How will this impact the actual number? We will find out shortly. One thing to note: of the 100,000 consensus headline adjusted print, the seasonal adjustment factor itself will be roughly three times the actual print that will move the market. In a year of record temperature abnormalities and the "average seasonal adjustment" being anything but, we leave it up to readers to do with this data as they see fit.
While normally quite absurd, we do have to admit that last month, Deutsche Bank's Joe LaVorgna was among the analysts closest to the final actual number, which came in far below consensus. As such we give him the benefit of the first forecast: Joe LaVorgna is expecting a headline/private payroll increase of 75k/80k respectively. The market is looking for 100k/110k. Unemployment is expected to hold at 8.2%. The irony today is that max pain is a far stronger number, which in light of some very recent economic news, can not be ruled out (see Nick Colas' discussion below): if indeed NFP rises by well over 100,000 the market will have to push back its prayer that the NEW QE will come in September into 2013 as Bernanke will not do another easing round just as the presidential election approaches. What are some others thinking? Here is what Bank of America says.
Expectations were for an increase in non farm payrolls of 160,000, and a 8.2% unemployment rate. We got +115,000, and 130,000 privates. Unemployment rate at 8.1%, lowest since January 2009. Schrodinger is alive and well.
But anyway, the big thing is liquidity right now, not whether or not you have a job.
What's your wild guess?
- BOJ Adds to Monetary Easing After Contraction (Bloomberg)
- EU to punish Spain for deficits, inaction (Reuters)
- Obama, China's Xi to tread cautiously in White House talks (Reuters)
- Global suicide 2020: We can’t feed 10 billion (MarketWatch)
- Greece rushes to meet lender demands (Reuters)
- Obama Budget Sets Up Election-Year Tax Fight (Reuters)
- Foreign Outcry Over ‘Volcker Rule’ Plans (FT)
- Moody’s Shifts Outlook for UK and France (FT)
- France to Push On With Trading Tax (FT)
Whopper of a NFP number, which prints at 243K, higher than the biggest forecast of 225K, on consensus expectations of 140K, the biggest jump since February 2009. The devil will certainly be in the revision details.
August Total Non Farm Payrolls Come At -54K On Consensus Of -105K, Unchanged From July, Unemployment Rate 9.6%, Birth Death Adds 115KSubmitted by Tyler Durden on 09/03/2010 08:32 -0400
Private payrolls come in at +67K as Birth Death adds 115K, compared to just 6K previously, as U-6 rises from 16.5 to 16.7%, highest since April. Total Part time workers (all industries) increased by 401k from 18,157 to 18,558; part time workers for economic reasons increased by 331K. Workweek unchanged month over month at 34.2 hours, with average hourly earnings up slightly from 0.2% to 0.3%. 42% of the unemployed were out of a job for 27 weeks or longer, compared to 44.9% previously; average duration of unemployment at 33.6 weeks.
Non Farm Payrolls Come At -226K After Census (411K), Temporary (31K), And Birth-Death Adjustment (215K)Submitted by Tyler Durden on 06/04/2010 08:40 -0400
So much for that 700,000 expectation. At 431k, less 411k census, and 31k from temporary help services, it sure doesn't look good even without the 215k birth-death adjustment which only conspiracy theorists look at according to Mr. Liesman. 431k minus 411k minus 31k minus 215k = -226k. Nuf said. In other news, those unemployed longer than 27 weeks hits a new record at 46%. Nothing conspiratorial about that number.
March Non Farm Payrolls: +162K, Below Consensus, Unemployment Rate 9.7%, Ex-Census, Weather and Birth-Death NFP Change Is -67KSubmitted by Tyler Durden on 04/02/2010 08:32 -0400
Key data points for March: change in NFP: 162K; of these - Census +48K; Weather ~+100K; Birth/Death +81: Net -67,000. Underemployment increased to 16.9%. In the meantime the dollar is surging, and the 10 Year is approaching 4.00%