Previewing Today's Payrolls Report

Tyler Durden's picture

Below are the expectations of the biggest banks for today's Nonfarm Payroll number to be announced in just over two hours:

  • Morgan Stanley +135K
  • Barclays Capital +150K
  • Goldman Sachs +150K
  • Bank of America +160K
  • JPMorgan +165K
  • HSBC +179K
  • Deutsche Bank +180K
  • UBS +190K

A quick and dirty summary from RanSquawk:

US employment data throughout February has been relatively strong with February’s ADP employment change printing at multimonth highs at 198K. Last month’s figure was also revised higher from 192K to 215K. Weekly jobs data has also been positive over the last few weeks, indicating the US jobs market continues to make a recovery. Furthermore the employment subcomponents in both ISM surveys were strong, signifying hiring in the US continues to grow. However, last month also saw the unemployment rate increase to 7.9% from 7.8%, highlighting the fact that the US economic recovery is still in its early stages. Some analysts suggest the  snowstorm that hit the Northeast during the start of February could impact the figure although the above metrics show the weather influence on the figure could be lower than many first expected. On Wednesday, Deutsche Bank were projecting a -75K impact from weather, down to 125K, however following the ADP figures this week, have revised their forecast to 180K.


The unemployment rate could be the key figure to watch again following the Fed’s introduction of the “Evans rule”. As a reminder, at December’s FOMC meeting the Fed announced they would keep rates at record lows until the unemployment rate drops below 6.5%. However, FOMC voter Bullard recently said unemployment in the low 7’s could let the Fed end QE, although it should be noted Bullard has a hawkish stance. On the other hand, following Bernanke’s Humphrey Hawkins testimony, many Fed members, including Yellen, have said the Fed should press on with QE with benefits outweighing risks.

The market reaction is also quite clear:

A strong beat will send GETCO's (and Citadel's) collocated algos in a buying frenzy, as an improving economy with at least 9 more months of $85 billion injected in the economy each month (since Bernanke has made it clear he will not taped off QE no matter what, and not like he can anyway) means BTFD.

A big miss means even more perpetual QEasing, which in a market where only liquidity matters, will push GETCO (and Citadel) to buy some more.

A goldilocks number will certainly unleash a buying wave because with no incremental data, the recent momentum wave will have to continue no matter what.

A can't lose market.

And for those who care, here is a less cynical, if more worthless, preview of the NFP from Goldman:

Payrolls Preview: Moderate 150k Gain, Unemployment to Stay at 7.9%

  • We forecast a gain of 150k payroll jobs in February, a bit below the consensus forecast of +165k. The unemployment rate will likely remain at 7.9%.
  • In terms of potential leading indicators for Friday's number, despite the better-than-expected ADP report and a solid reading on the ISM services employment component, the four week moving average of initial claims was little changed from the January to the February survey week, while the ISM manufacturing employment index edged down and online job postings declined.
  • The sequester will probably not weigh significantly on February payrolls but will be more important in the coming months. The effect of the February blizzard in the Northeast will probably also be fairly minor.

We forecast a gain of 150k payroll jobs in February (vs. consensus +165k), similar to the 157k increase seen in January. This rate of payrolls growth is consistent with a moderate rate of economic expansion but is not sufficient to bring down the unemployment rate rapidly. The labor market series that we normally track as potential leading indicators for payrolls were fairly mixed in February, leaving us comfortable with our call for similar job growth to last month.

Round-up of February Labor Market Indicators


1. The ADP employment change was stronger-than-expected at +198k (vs. consensus +170k). As ADP measures private employment, subtracting off a small drag from government employment would suggest a total payrolls gain in the neighborhood of 190k. However, ADP over-predicted the private payroll gain last month by roughly 25k, and more generally, the utility of ADP as a leading indicator for payrolls remains to be seen following significant methodological revisions last year.
2. The ISM services employment component remained near post-crisis highs at 57.2 in February, suggesting solid expansion in service sector employment.


1. The 4-week moving average of initial claims for unemployment insurance was roughly unchanged from the January survey week to the February survey week (around 360k). Since then, the 4-week moving average moved down to 349k, with the Labor Department noting no special factors impacting the data. This will be a positive indicator for the March report if sustained.


1. The ISM manufacturing employment index ticked down to 52.6 in February (from 54.0), on the lower end of the range seen over the past three years.
2. The Conference Board's Help Wanted OnLine (HWOL) data showed a decline in seasonally-adjusted internet job postings of 44k in February to 5.057m.
3. The household survey data has been running weaker than the payroll survey over the past three months, with the payroll-consistent household measure (adjusted for definitional differences between the two surveys) showing an average monthly employment change of -152k jobs, compared with +200k for the payroll survey. Although the household employment measure is much more volatile than payroll employment, we have found lags of the indicator to have some explanatory power for current-month payrolls.

Weather and Sequester Will Probably Have Only Small Impact in February

The February print will probably not be impacted to a major extent by special factors, including weather and the sequester. The February 8-9 blizzard in the Northeast occurred just before the payrolls survey week. We believe that relatively few people were unable to report to work for the entire subsequent week due to the snow, and as such the impact on measured payroll employment should be fairly minor. However, initial claims for unemployment benefits in Connecticut rose by roughly 2,400k in the week after the storm, an outsized increase relative to normal volatility for the state.

On the sequester, the Pentagon noted as of February 20 that of the 46k potential cut to its temporary workforce, only 6-7k individuals had been laid off or were in the process of being laid off. The sequester impact that might show up in the February employment report would likely be somewhat smaller than that, considering that those "in the process" of being laid off are probably still counted as employed according to BLS's definitions, and we expect that other agencies have not been as proactive as the Pentagon on layoffs. However, there may be some impact, perhaps several thousand jobs, from announced hiring freezes preventing normal hiring that otherwise would have occurred. In coming months we expect the sequester to have a much more significant negative impact on employment, although probably somewhat less than the widely cited 750k estimate from the CBO. Anecdotally, this morning's Challenger, Grey, and Christmas mass layoffs report noted potential layoffs of 3,000 announced by aerospace company United Technologies Corp and 3,500 from BAE Systems, probably the leading edge of many more defense contractor job cuts.

Unemployment Rate Likely to Stay at 7.9%

The unemployment rate will likely remain at 7.9%. Although 150k on payrolls should be sufficient to reduce the unemployment rate slowly over time, last month's unrounded unemployment rate was 7.92%, meaning that a full 8 basis point (nearly one tenth) decline would be needed to push the unrounded rate down to 7.8%. Labor force participation has remained at 63.6% for the past three months, appearing to stabilize somewhat during 2012 following three years of declines. Our forecast is for a roughly stable labor force participation rate during 2013. A February decline in labor force participation would introduce downside risks to our 7.9% unemployment rate forecast.

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GetZeeGold's picture



Any word of expectations on revisions?

hedgeless_horseman's picture


Bank Fishing for Trout +210k

hedgeless_horseman's picture



  • Morgan Stanley +135K
  • Barclays Capital +150K
  • Goldman Sachs +150K
  • Bank of America +160K
  • JPMorgan +165K
  • HSBC +179K
  • Deutsche Bank +180K
  • UBS +190K

    Actual is 236k, meaning my 210k was the closest, by far, and not even a green arrow.  :(

    Too much to ask for my bonus, now?

    Sudden Debt's picture



    People love illusions and illusionists.

    David Copperfield, Siegfried and Roy, Lance Burton, Doug Henning, Ricky Jay, Harry Anderson... Ben Bernanke...

     It's not actually magic, BUT WHO CARES!!!

    Bobbyrib's picture

    If the banks continue to cut jobs themselves, does that mean the Fed needs to print even more money to bring them back to "full employment"?

    eigenvalue's picture

    Whatever the numbers are, precious metals will crash and break the hearts of goldbugs and silverbugs.

    GetZeeGold's picture



    Hope so....when I started buying gold it was dirt cheap.


    That crap is expensive these days....I'll take any break I can get.


    I give Ben Shalom full permission to drive the price down using your grandkids money. It's not like it's costing me anything.

    fonzannoon's picture

    is this eigen person the classic case of someone who went all in for a gold eagle at $1,925 and probably paid over 2k and has been steaming ever since or what?

    GetZeeGold's picture



    I'm guessing it's worse than that and he doesn't have any.


    Naked and defenseless is not a good feeling.

    Anasteus's picture

    If so, he has an excellent opportunity to buy some during these bonanza days.

    Ghordius's picture

    I remember him (perhaps wrongly) uttering goldbug phrases, before - perhaps his wife has gone and has taken his stash with her - alternatively he might be enjoying the "troll attention" he gets with this audience

    espirit's picture

    With you on that GZG.  Powder is dry, waiting for the next buying op as is everyone else.

    Come on down!

    Sheeple Shepard's picture

    The "Peoples" Bank of China is sure hoping your right.

    Sheeple Shepard's picture

    Did you just up-tick yourself, eigan? 

    Bobbyrib's picture

    The number will be whatever pretend number they make up.

    insanelysane's picture

    Of course California's numbers will be estimated due to snow storms in the mid west and north east.

    Jayda1850's picture

    i fucking hate jobs fridays! I spend all day wanting to punch zandi , goolsbee, and liesman right in their fucking face!

    GetZeeGold's picture



    If those guys were to volunteer to get their faces punched in a public auction....think of the money they could generate.


    They should do it for the children.

    abugarance's picture

    lads, margin of error of +/- 100 K for a Hi-Lo variance of estimates of...55 K...move on, the show must go on

    espirit's picture

    Meaningless drivel metric in reality, except to the algo driven rampapalooza shitfest. 

    jmcadg's picture

    Bring it on. Eigenvalue understands nothing of the difference between paper and physical gold and silver.

    Let's keep him in the dark.

    Archetype's picture

    It dosnt matter if the numbers comes in at 300K, the valuations of stocks have discounted everything. Yet the big boys seem to expect very low numbers... This is a pyramid scheme set to end extremly bad sooner then most people think. Of course the numbers are going to exceed expectations today, the big boys need the last epic friday coke-retard short squeeze super rally. Disgusting...

    I need more cowbell's picture

    Someone pinch me. Even at ZH, everyone is huddled around the screen talking about and anticipating a BIG FUCKING LIE. They know its a lie, but contend this particular lie is somehow more interesting than the other repetitious week after week, month after month lies. Why? It moves the "markets" more.


    GetZeeGold's picture





    It's complicated.....but it all boils down to tradition. Imagine what would happen if they didn't lie.

    Ghordius's picture

    I beg to differ, this is a cultural thing. May I remind the audience that we had much fun poking at continental european politicians dropping the mask, winking "you know that I have to say what I said before" or just blatantly say what they really think?

    note that they get support and get elected for this or instead of this very behaviour and I severely doubt any Briton or American would do so

    to this Berlusconi made me laugh again - to the question of a cute student if he knows that every human is at least 10% homosexual he answered: "it might be, but my 10% are firmly lesbian"

    Kristian's picture

    Very good number, that's bad news, very bad number, that's bad news. Expect a goldilocks number for the markets, as long as the QE money keeps flowing, but actually that is guaranteed for the coming three years, so this number doesn't matter. By Monday it will all be forgotten.

    Silverhog's picture

    Went to my local MA Home Depot around noon last Tuesday. They have a banner saying "Now Hiring" But walking around the store it's totally devoid of customers. Groups of employees standing around gabbing. Was asked if I needed help at least ten times. Guess they just want to be ready for the big recovery we keep hearing about. I bought 2 light bulbs, that should help.

    Diplodicus Rex's picture

    For the non-americans amongst us can anyone offer an explanation of "non-farm payrolls"? Presumptions already made (rightly or wrongly) from the description are:

    The labour force involved with farming is for some reason excluded (too much seasonal variation perhaps?)

    The (+)number itself is the number of people just hired in the period (or (-) made redundant in the period?)


    I understand this may be a very basic question but sometimes the pet names for these stats are meaningless unless you've grown up with them.

    Thanks in advance.

    Ghordius's picture

    your explanation is the correct one, and the number is a net one - an increase of the total workforce is expected around the above numbers

    additionally, for a while US agri-mechanization and agri-business were eating up farming labour so much that it was a bit too depressing to count, but yes, agri-labour fluctuates during the year

    watch out for meteorites, btw

    deerhunter's picture

    homeowner plumbing issues twice in last month led me 3 times to Home Depot and ditto there being more employees in the store on all 3 visits.  One visit at 9 AM weekday when the small contractors used to line up buying for their work day.  Look around,  closed shops everywhere, commercial and industrial properties  for sale and lease everywhere and empty billboards.  Wake up,  it is coming.  And it depends on what your definition of "it" is,,,, kind of like "is" is. 

    Oldwood's picture


    Its all in your mind. Everything is going puuurfectly!

    Cypher: You know, I know this steak doesn't exist. I know that when I put it in my mouth, the Matrix is telling my brain that it is juicy and delicious. After nine years, you know what I realize?
    [Takes a bite of steak]
    Cypher: Ignorance is bliss.

    natronic's picture

    IF Goldman says 150k then it's 150k

    MFLTucson's picture

    Expect a huge beat because the numbers must be made up to keep the hellium in the Wall Street Casino.

    douglas's picture

    Whatever happens with the job numbers - I hope it brings down the price of PM¨S!  I´m ALWAYS rooting for the price to come down and I´m ALWAYS hoping TPTB´s price manipulation continues to work for a bit longer.  Just with looking at the debt numbers (not to mention all the other fundamentals), we know for a fact that sooner or later PM prices are going to the moon, so be thankful for the time they give us to keep buying - especially at bargain prices. We need to stop rooting for the price to shoot-up, because the day that it happens means that its the SHTF scenario and that life will never be the same - even for those of us that wisely invested in physical PM...  Take advantage of what life has to offer now (much of which will cease to be available) - sit back and enjoy the show.

    thismarketisrigged's picture

    i dont know what to hope for.


    truth is, i wish unemployment was 5.0 because the fed would have to leave and then the market would crash.


    either way, u know the market will go up based on whatever the number is.


    i really fucking hate these bankers and feds and obama, i wish they all played in traffic


    just remembers guys, if we miss on the numbers, its due to hurricane andrew in 92 and katrina from 05. and its bushes fault.

    Oldwood's picture

    The market will never be allowed to crash until they are convinced that they have virtually every last muppet dime in existence. Not saying external things might not collapse it sooner. Afterall it is all about illusion and they can't control everything, but, they will do what ever they can to extract any remaining wealth.

    thismarketisrigged's picture

    thank god they waited a week to release the reports as opposed to last week when it was supposed to be.


    i cant fucking stand listening to jared bernstein on cnbc, i fucking hate that stupid douchebag. he is a fucking nobody. i hope he dies

    thismarketisrigged's picture

    why dont they just fucking set the bar for 0 jobs created so then its always above expectations regardless, anyway to rig the market

    Oldwood's picture

    We all would like to believe that honesty is the best policy but after three marriages I have found that not to always be true. Try telling your wife how that outfit really makes her ass look and you will know what I mean. But yes, it does suck. They will never allow us to truely know the truth because knowledge is power and they dare not let any of that go. Afterall, this is about power, right?

    Bingfa's picture

    Like I said, It's SNL everyday with the Obama Administration.....

    What's beyond full retard?