Goldman's Payrolls Postmortem: Weak Job Report But Fed Still Tapers Another $10 Billion In January

Tyler Durden's picture

The firm that advises its former employee Bill Dudley on how to run the New York Fed, speaks. Goldman's bottom line: bad jobs report, the weather was at fault (and apparently all those economists who had expectations of a 200K print were unaware it was cold out there until today) but the Fed will still taper by another $10 billion in January.

BOTTOM LINE: The December employment report was broadly weaker than expected, although some of the disappointment was likely due to bad weather. The unemployment rate unexpectedly declined due to a drop in participation.




1. Nonfarm payroll employment grew only 74k in December (vs. consensus 197k), the weakest increase since 2011. Colder-than-normal weather likely played some part in the disappointment, as construction employment declined 16k (vs +19k in November) while leisure and hospitality employment grew 9k (vs. +20k in November). However, job growth was weaker across sectors in December, including a particularly sharp slowdown in health and education services (flat vs. +41k in November). Couriers and messengers, a category that has sometimes shown outsized December moves in recent years, fell only 6k. Government employment also subtracted from job gains, as state and local employment declined 11k after stronger growth in recent months.


2. The unemployment rate declined by three-tenths to 6.7%, however the drop was largely due to a two-tenths decline in the participation rate to 62.8%. Employment rose 143k according to the household survey, although "payroll-consistent" employment?adjusting for definitional differences between the two surveys?fell by 8k. Also from the household survey, the number of individuals who reported not being at work due to bad weather was 273k, above the December average of 138k, and consistent with a negative weather impact in the report. This estimate, however, is very likely larger than the true weather impact on payroll employment.


3. Average hourly earnings rose a smaller-than-expected 0.1% (vs. consensus +0.2%). The average workweek also fell by one-tenth of an hour to 34.4 (vs. consensus 34.5), although the worsening could reflect a temporary weather effect.


4. The information in today's employment situation report does not change our expectation that the Fed will continue to taper its asset purchases by $10bn at the January

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Wm the Shrubber's picture

"Another" $10BN?  I am not aware that they have tapered anything at this point.  Watch what they do, not what they say!

Headbanger's picture

We can't say they didn't warn us now, can we??

NotApplicable's picture

I don't understand why this Tyler keeps talking about the "Taper" like it's already happened.

Between the "Post-Taper" comments of the last few days, and today's "another $10B" I'm left with little choice but to wonder if this is sloppiness or if we've got a rouge Tyler on our hands?

Care to comment, Tyler?

Bastiat's picture

If they do the taper who buys the paper?


madbraz's picture



With QE, reverse repos and securities lending, there is no need to buy treasury collateral - the friendly NY Fed gives it to you for free.  This will change at some point and interest rates will resume their downfall.


Watch for reverse repos today to top $100 billion.  Players need free treasury collateral to cover their treasury shorts and help the plunge protection team keep the stock market from falling more than 0.5% - which for the FED is a crash already.


For the rich - a CD that pays 10%+ per year (manipulating and speculating in the stock market)

For the poor - more misery


Out Obama.  Out the FED.

disabledvet's picture

they're called "partners" actually...these are real people. Once they pull out "they're done." How are they going to raise capital here? Where is their liquidity in all that "premium pay"?

Headbanger's picture

A rhetorical question no doubt.

disabledvet's picture

not really actually. "ummm, excuse me...i've been selling naked short positions on Ballard Power and am now down 400 million six weeks. Can I have my bailout plese?"

jay28elle's picture

Time tlet the house of cards fall.  After all this serves 2 opportunities for this admin; (1) moer distractions to current "scandals", and (2) as a couple of Obama's mentors (Cloward & Piven) advocate, the only way to effectively rebuild society is to do so after total collapse. 



Musashi Miyamoto's picture

Taper... Taper not...

Last of the Middle Class's picture

More taper-talk, head fake b.s. Economy won't take it at this point even though inflation is everywhere. Bankers are addicted to it, TBTF's are channel stuffing like crazy, Jobs report sucks a big green one. Still slamming down gold periodically. Yeah sure the fed is about to taper big time. They might be trying to hit the taper button just as they see the enemy at the front gate, but that's abou it.

Save_America1st's picture

so...tapering down to what?  110 Billion per month?  We already know it hasn't been at 85 Billion since at least 8 months ago.  They were at around 130 Billion per month, so any tapering has been well priced in since like May or so.

They do know that the internet exists and that we know what the fuck they're up to....don't they???? LOL

NotApplicable's picture

Unfortunately, reality is but a plausible belief system, where facts carry less weight than the continuous sound-bite injected headlines. If a plastic, talking-head authority figure says something, well it's fucking gospel.

(a.k.a. "Orwell 101")

evernewecon's picture




(usefully) pre-set to 14 min. but with the

artificial bubble plainly described at 16m.


The Fed itself earlier saw an asset bubble.

Fed's Lacker Admits "Asset Bubble" - Reluctant To Pop It



The evidence is really piling on now.

The kids denied assembly complaining 

about non-democratic monetary/fiscal

policy saw what couldn't be more 

transparent, speaking of emporers' 


Goldman: Weak Jobs But Taper Still Expected

 (Once The TBTF Banks' Bubble Is Bought 

Their Main Concern Reverts To The



It Should've Been The Opposite:

Bail The People, Let The Banks

Lose Money And Fail, Then Apply

Monetary Largesse As Needed In

Rank Job Creation For Its Own

Sake, Just As FDR Did.


I know.   Here it comes.

We've seen a giant public works

program--for bank losses converted

to profits, with adversity thus 

created the next buying opportunity

now that those who originally sold

the mortgage bubble having suffered

"and-it-over," creating the the new

artificial bubble. 


It's the bankers themselves who've

flipped the controlled inventory.


Case Shiller weighs more recent

purchases and sales round trip.


So it's the anti-FDR crowd amongst 

the banks who've been the largest

beneficiaries of Keynesianism AS WELL

AS privatized monetary policy.


A Resolution Trust Cp. type solution

jiggered for minimizing disruption

combined with an Administration of

Christina Romer's would've, along 

with allowing those who sold the 

bubble to have cleared the market

right off, would've obviated 5

years, potentially getting worse,

of financial crisis.

Those who put down 5/10% should have

non-recourse instead of de facto

chains (may revert to a mortage 

release program now that the banks'

mortgage securities are largely

bought) really serving taxpayer

financed bank "loss sharing."



If things ran democratically I think

process informed markets wouldn't 

lead to public works programs in

name for full population ends 

or through deceit in favor of a few

--with this being where Humphrey

and Mondale's creations

("trickle down"  and  "where's the



are euphemisms for what's 

left for the serfs, even if the 

American variety might gain a few



Here's what happens when people 

feel ripped off, if the monkeys

are any indication.



But non-democratic process isn't 

limited to the banking sector.


The health insurers enjoy immunity

from anti-trust and defined profit

boxes, with government fees passed

to patients, effectively then backdoor

taxes supporting that.



GMO's are privatization of the food chain.



It's the forests, the internet, 


A whole gaggle of control freaks and











darteaus's picture

Taper $10B off of a $4T balance?  How is that tapering?

Once a government starts printing money they never stop.  That's the historical record with paper money, and human nature has not changed.

thunderchief's picture

They are talking too much about this, just as the mainstream media is tripping all over themselves to bash gold any chance they get. If you have not lost confidence in the dollar yet, just keep listening to these idiots.

moneybots's picture

"... but the Fed will still taper by another $10 billion in January"


I thought that was when the tapering was supposed to begin- January.

dunce's picture

!0 billion is not a taper it is the same rate as last month, 12 billion less would be a taper.