Complete Jobs Report Preview: NFP Exp. 185K, Unemployment Rate Exp. 7.2%

Tyler Durden's picture

from RanSquawk

US Change in Nonfarm Payrolls (Nov) M/M Exp. 185K, Low -25K, High 230K (Prev. 204K, Sep 148K)

US Unemployment Rate (Nov) M/M Exp. 7.2%, Low 7.0%, High 7.5% (Prev. 7.3%, Sep 7.2%)

Payroll change estimate by bank:

  • HSBC 165K
  • Goldman Sachs 175K
  • Bank of America 175K
  • JP Morgan 180K
  • Citigroup 180K
  • Deutsche Bank 185K
  • UBS 190K
  • Barclays 200K

Today sees the release of the US nonfarm payrolls and unemployment figures for November, the last to be released before the FOMC’s final policy decisions for 2013. The release will therefore be keenly-eyed, in order to gauge whether the FOMC will see sufficient strength in the labour market to begin reducing the current pace of USD 85bln per month in Treasury and MBS buys. The importance of today's number was highlighted just over two weeks ago by Fed’s Bullard (voter, dove) who noted that a strong November jobs report would raise the chances of December QE taper.

Last month, the October reading by far exceeded expectations, coming in at 204K versus an expected 120K. The reading was described by renowned WSJ Fed watcher Hilsenrath as “fluky”, saying it required a higher than usual degree of caution. The average for the year prior to the reading (before revisions) was 166k.

Wednesday’s ADP Employment release showed 215k jobs added versus a median expectation of 170k, with the October reading revised higher by 54k. However, correlation between ADP and NFP has been questionable this year, largely due to the ADP reading failing to take account of public employment. Furthermore, this week’s employment components of the ISM readings were mixed; although the manufacturing release showed the highest employment figure since April 2012, the services employment component missed expectations, declining to 52.5 from 56.2 in October.

Meanwhile, having declined from 7.5% to 7.2% between July and September, the unemployment rate increased back to 7.3% in October. However, this was attributed by many to the effects of the government shutdown during that month, whereby furloughed workers were considered as unemployed. Markets will therefore look for this to be corrected.

Market Reaction

With seve ral Fed members having stated that a December taper is still an option, today’s report from the BLS has the potential to induce aggressive moves across asset classes. Following the aforementioned ADP release, the US 10y yield printed its highest level since mid-September just below 2.85%. A headline figure towards the top-end or above the expectation range would likely see a similar move, with equities and precious metals also at risk of considerable downside.

Conversely, a lower-than-expected payrolls reading would likely push back taper forecasts and thus generate opposite price action to the above, with USD weakening. However, a reading that is low but well within the expectation range will be unlikely to push taper forecasts beyond March of next year and the subsequent reaction may therefore be subdued.

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alien-IQ's picture

Over 200k = Market goes into freefall

Under 150k = Full Retard Parabolic move.

GetZeeGold's picture



With the current state of the economy....just about anything should be bullish I'm thinking.

Shocker's picture

Its always bullish.. right

Layoff List -


Looney's picture

If you like your minimum-wage job, you can keep your minimum-wage job. PERIOD!  ;-)


GetZeeGold's picture



Just keep it under 29.5's the law!

Looney's picture

Yeap! And fasten the seatbelt... it's the law too! ;-)


GetZeeGold's picture



Does that mean there's going to be a law that forces everyone to buy a car coming next?

fonzannoon's picture

I am guessing 190k. The perfect number to keep the market stabilized and start to allow the move in the 10yr towards and finally over 3%.

Cursive's picture


10-yr. crossing 3% does not a stable market make.

ejmoosa's picture

Just remember that last year we had a number of 247k for November...

So IF things are getting stronger, it should be more, right?

Cleetus's picture

Regardless, I will be going back into the market at days end. Get me some


ParkAveFlasher's picture

Welcome to Applebee's, please enter your password.

Charles Nelson Reilly's picture

Either way.... Gold should get smashed.

GetZeeGold's picture



Goes without saying really. It's the only government program that's working for me.


Thank goodness.....who wants to pay retail?

BandGap's picture

I had a boss who used to do this - get a weekly summary of outputs and immediatly react. Fucker drove me crazy as I would base actios on trends or process flows, I had 180 people to direct. It was always a juggling act to get shit done and keep his fingers out of the work. Always with the reorganizations, too.

Seems to me this "data" gets treated the same way. Regardless of today's numbers te economy isn't getting better and taper on/off really doesn't mean shit. Assholes need a new game plan.

Doesn't help when every morning the idiot taking heads on local radio tout "the recovery". But you can tell from the tone of things the local announcers don't believe the bullshit they are being fed to broadcast to the masses. We're getting close, people. Mainstream America isn' buying the rainbow unicorns shitting skittles and pissing fruit juice.

Cursive's picture

215k, maybe 250k

youngman's picture

I think the headline number will be good again...but another million will have dropped out of the workforce.....I can't see with Obamacare kicking in that anyone is hring extra help...the market is not that strong

GetZeeGold's picture



Yeah.....we don't count the dropouts......cause that would be something else entirely.

BandGap's picture

Lot of small and medium sized companies taking their time hiring due to O'care. I have never seen such a wait and see attitude.

All hell has to break loose when those that think they have coverage show up at the doctor's office after Jan 1. Or when they finally see what it costs. The media is chirping about this when they should be roaring.

GetZeeGold's picture



The media is chirping about this when they should be roaring.


Chris Matthews is all over this.

jballz's picture

177 bitchez...

spiral galaxy's picture

500K account for all the IT & programing hires for the Heathcare website.   Perhaps throw in another 100K on top of that for the extra spindoctors needed for media appearances and blog write-ups.   ......all temporary, of course.

Sleepless Knight's picture

It doesnt matter. 7.2 % is a fantasy and so will any number the publish today. They will make it "less of a lie" in the corrected numbers later.

Dan The Man's picture

Someone needs to invent "NFP Day: The Drinking Game"

stant's picture

the predicted lie is confirmed, watched the futures go ching ching up as it was being reported lol of the day