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Payroll Preview: Who Expects What

Tyler Durden's picture




 

From RanSquawk

US Change in Nonfarm Payroll (Dec) Exp. 197K (Low 100K, High 250K), vs. Prev. 203K, October 200K

US Unemployment Rate (Dec) Exp. 7.0% (Low 6.8%, High 7.5%), vs. Prev. 7.0%

  • Citigroup 165K
  • Barclays 175K
  • UBS 185K
  • HSBC 191K
  • Goldman Sachs 200K
  • JP Morgan 215K
  • Bank of America 220K
  • Deutsche Bank 250K

Today's NFP and indication of labour market conditions will be the first key piece of data after the FOMC decided to begin tapering in December, and keenly followed as an indication of how the Fed may alter their bond-buying program at the next meeting at the end of January. The Non-Farm Payrolls six-month average now sits at 179.5K, however the past two readings have come in very near 200K, a mark noted by several on the FOMC as a consistent level needed to support the view of a "substantial improvement in the labour market" and hence justify another taper of the Federal Reserve's current bond buying program. There were a few special factors that affected the previous reading, with the BLS noting that among the unemployed, the number who reported being on temporary layoff decreased by 377K, which largely reflected the return to work of federal employees who were furloughed in October due to the partial government shutdown. In terms of this month's reading, the couriers and messengers industry could affect the reading due to online demand during the festival period, and notably this month’s report will include new seasonal adjustment factors for the household survey, which often leads to revisions to the unemployment rate over the past few years.

Recent employment data has been relatively well received, highlighted by Wednesday's better than expected ADP which was the largest increase since November 2012 and led to several analysts upping their calls for today's reading. Yesterday also saw initial jobless claims fall to 330K last week from a previous 345K, beating the median expectation for 335K. The unemployment rate is expected to remain unchanged at 7.0%, stabilising from the decline observed over the past few months and at its lowest level since November 2008 with an increase in the participation rate, a trend which could influence the reading seen today.

Market Reaction

Although a knee-jerk reaction is often seen across asset classes following a beat or miss on the NFP headline, a sustained reaction will likely be driven by whether this data is interpreted as supporting or pushing back the view of tapering by the FOMC once again this month. Markets are currently pricing in a taper of USD 10bln again at the end of January, and a reading in-line and near 200K is expected to support this view. Only a large miss on expectation is likely to push back the view of another tape to the next meeting in March, however a decent beat on 200K is seen as increasingly the likelihood of a taper greater than USD 10bln.

 

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Fri, 01/10/2014 - 09:09 | 4318874 Headbanger
Headbanger's picture

Yellen: 550k

Fri, 01/10/2014 - 09:12 | 4318882 GetZeeGold
GetZeeGold's picture

 

 

How many of those jobs come with free healthcare?

Fri, 01/10/2014 - 09:15 | 4318888 icanhasbailout
icanhasbailout's picture

I expect lies.

Fri, 01/10/2014 - 09:15 | 4318890 Bobbyrib
Bobbyrib's picture

And you shall have it!

Fri, 01/10/2014 - 09:30 | 4318901 Supernova Born
Supernova Born's picture

The numbers move independent of reality.

Numbers are only needed to create a narrative that fools most of the people most of the time.

That is getting easier by the day.

Fri, 01/10/2014 - 09:41 | 4318997 kralizec
kralizec's picture

Could probably just as well watch monkies throw their shit against the wall...at least what they do is honest...

Fri, 01/10/2014 - 09:44 | 4319009 wallstreetapost...
wallstreetaposteriori's picture

I love when realit punches these guys in the balls.... 74K  must be the weather.

Fri, 01/10/2014 - 09:37 | 4318974 AlaricBalth
AlaricBalth's picture

In the last ten years, job growth in America's non-health-care economy has been dreadful. Just 2.1 percent total -- or barely 0.2 percent per year. (Yes, that's point-two percent annual growth.) In that time, the U.S. health care sector has grown more than ten-times faster than the rest of the economy, adding 2.6 million jobs.

Take a look at the growth of health care employment (in red) and the decline in construction and manufacturing employment (in blue).

http://cdn.theatlantic.com/static/mt/assets/business/assets_c/2013/07/Sc...

http://www.brookings.edu/~/media/Research/Files/Reports/2013/06/28%20met...

Fri, 01/10/2014 - 09:12 | 4318880 Grande Tetons
Grande Tetons's picture

The worst thing would be an in line number. Hoping to see a monster beat and see how the market reacts. 

A monster miss could happen...but that is not in the direction of the big lie. 

Fri, 01/10/2014 - 09:20 | 4318887 Racer
Racer's picture

Snake oil salesmen's guesses about fake numbers

Fri, 01/10/2014 - 09:16 | 4318889 Musashi Miyamoto
Musashi Miyamoto's picture

Never underestimate the audacity of a serial bullshitter... They will woo us with promises of wealth and job creation while they jam the rod where the rod don't go.

Fri, 01/10/2014 - 09:16 | 4318891 MFLTucson
MFLTucson's picture

This is just ridiculos to come out with a report excluding half the workforce.  How the hell does this represnt anything but a game?

Fri, 01/10/2014 - 09:18 | 4318896 101 years and c...
101 years and counting's picture

no matter what the number is, it will be the "sweet spot" to get stocks to new highs.  the banks already know and cant hold back their enthusiasm.  look at futures.

Fri, 01/10/2014 - 09:21 | 4318898 Fíréan
Fíréan's picture

Are they taking bets ? and can one bet on the revised-at-a-future-date number ?

Fri, 01/10/2014 - 09:23 | 4318902 JustObserving
JustObserving's picture

How can anyone care about a number that is usually fabricated?  Remember the fake data that got Obama reelected? Besides, there is the Birth-Death model that skews unemployment.  All in all, a pretty meaningless, manipulated number but Wall Street must have its theater:

An employee in the Census Bureau, under pressure to make the required amount of interviews to formulate the monthly nonfarm payrolls report, allegedly fabricated interviews that consequently made the unemployment rate slide from 8.1 percent to 7.8 percent, according to the New York Post.

That drop was highly consequential because it was the next-to-last reading on the jobs market before the November presidential election.

http://www.cnbc.com/id/101211044

Fri, 01/10/2014 - 09:28 | 4318916 Belrev
Belrev's picture

Are those average annual USD salaries at those banks?

Fri, 01/10/2014 - 09:28 | 4318917 Shizzmoney
Shizzmoney's picture

This "economy" is such a sham

Fri, 01/10/2014 - 10:11 | 4319141 ChiSox56
ChiSox56's picture

How do the connected banks miss this bad? I mean even if they applied the government fabrication multiplier correctly they shouldn't have missed this bad.

Fri, 01/10/2014 - 11:04 | 4319334 sunnyside
sunnyside's picture

If you miss that bad you are either incompetent or in on it.

Fri, 01/10/2014 - 16:14 | 4320726 HEY YOU
HEY YOU's picture

It would be nice if all employees were like me.

I am completely irreplaceable to the economy.The company would not survive without me. I will never be dismissed unlike some,that means you,regardless or your position on the food chain.

Have a great Monday-1/13/14

"Good morning,we will no longer need your service. Security will accompany you to the exit. We will box your personal property & you can retrieve it tomorrow,in the lobby."

I'm sorry.I have issues with being nice.

Do NOT follow this link or you will be banned from the site!