Why Tomorrow's Jobs Report May Surprise

Tyler Durden's picture

With all eyes hope-full-y transfixed on tomorrow's non-farm payrolls data and its confirmation-biased 'select-a-headline' post-data farce, we thought it worth a look at the noise in the signal and a reminder, as Bloomberg's Joseph Brusuelas notes, the annual benchmark revisions that will be published and likely obliterate everything we thought we knew about job growth (or lack of). As Brusuelas notes, the January jobs report is likely to be better-than-forecast because the weather-impacted December estimate will see upward revisions as firms probably made up for hiring postponed during the previous month. While weather effects may dominate the topline estimate, the underlying trend in hourly and weekly earnings is likely to remain quite weak since it’s not contingent on swings in seasonal patterns.


Via Blomberg's Joseph Brusuelas,

Temperatures in the U.S during January were warmer than normal through the end of the Bureau of Labor Statistics employment reference week ended Jan. 12.

The January jobs report is likely to be better-than-forecast because the weather-impacted December estimate will see upward revisions as firms probably made up for hiring postponed during the previous month. Almost 300,000 new jobs may be added because of the combination of revisions and catch-up hiring, versus the 183,000 forecast according to a Bloomberg survey of economists.

Looking at the previous jobs reports from the past 18 major winter storms, the BLS has revised upward its initial estimate two-thirds of the time.


While first revisions to the initial estimates have not always been that impressive, the broad nature of the slowdown in hiring indicated by the December estimate suggests investors may see an outsized upward revision.


While weather effects may dominate the topline estimate, the underlying trend in hourly and weekly earnings is likely to remain quite weak since it’s not contingent on swings in seasonal patterns. A weak earnings environment is partially a function of the large number of unemployed and underemployed people. On a yearago basis average hourly earnings are up 1.8 percent and average weekly earnings up 1.5 percent. Neither are encouraging if the 3.3 percent level of consumption posted last quarter is to be sustained.


Lastly, the Department of Labor will publish its annual benchmark revisions to its comprehensive estimate of employment on Friday. That should add about 350,000 to the overall level of employment. Even so, the two-month average of the total change in employment should remain at or near the six-month average of 185,000 in private job creation.

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zorba THE GREEK's picture

The job number will be what they want it to be.

flacon's picture

Bullish for stAWKS? Bearish for gold?

fockewulf190's picture

It must be a bullish number.  They must keep the illusion fed with fresh pixie dust.  The weather only matters when an excuse is needed.  Gold must be smashed...it´s already a national security matter.  Expect CNBS to have a field day tomorrow telling the few viewers they have left to buy buy buy stawks. If you have any powder, get ready for a PM sale and grab as many oz´s as you can.  Don´t, don´t believe, don´t believe the hype!

eclectic syncretist's picture

If the number is good it will be because the TAPER IS ON, because the puppeteers want money to flow out of equities and into bonds now.  Good news will now become bad.

redpill's picture

lol how does Bloomberg source themselves on a chart for US Labor Participation rate?  FYI financial "journalists" taking someone else's data and throwing it into an Excel chart doesn't make you the source!

As for the jobs report, I think I speak for much of ZH that nothing is surprising anymore.

graneros's picture

Your statement holds true for every statistic out there. Increased chocolate ration anyone?

101 years and counting's picture

ie, everything is bad for the yen.

TruthInSunshine's picture

Just have government agencies or government-licensed entities fill whatever numbers in that they wish - those numbers can be as far from reality as the earth is from the outer edge of the universe.

I endorse this since if our government is going to repeatedly, consistently and massively like to us, let's finally have widespread acknowledgement of this fundamental reality, embrace it, and move on (some of us already have).

Start by having all shares of equities held by Congressmen & Congresswoman quadruple in value, via the stroke of a key, by tomorrow.




SDShack's picture

Chocolate covered turds anyone?

Sudden Debt's picture

It's already on youtube! Let's have a look to those numbers shall we?

The.Harmless.Who's picture



If you like your jobs number, you can keep your jobs number...


... but not your job.  Nope.  Not that.  


And the labor / labour participation force continues to decline.  


A big fuck you to the Zionist Fed!  


The Dunce's picture

There's job growth.  But the wrong kind.  Lots of shit jobs out there.  The middle class blue collar stuff has completely shit the bed.  Bastards.

robertsgt40's picture

"...1.3 million people who had their emergency unemployment benefits cut at the end 2013 and who therefore may leave the workforce."  Duh, if they're unemployed they aren't IN the workforce. 

youngman's picture

I am going for 120,000

Grande Tetons's picture

I will take 240,000. 

It will be spring soon and Obama needs to foucs on his golf game. He can not sit around worrying about jobs. 

Levadiakos's picture

Make mine a triple with a pitcher back

joego1's picture

Ah! This months lies how shall we serve them up?

Sudden Debt's picture

Obama did it again! what a great leader he is...

let's hope it keeps snowing so the snowdiggers kan keep their jobs!

SDShack's picture

Watch what they do, not what the numbers say. If employment is so good, and getting better, why did 0zer0 meet with CEO's last week and ask them to hire more?


They know what the real trend is. You can bet 0zer0 has the IRS and NSA monitoring each of these CEO's for compliance. 

Sick's picture

It will not be a surprise.  They will manipulate, twist facts and lie about the numbers...no surprise.

Quinvarius's picture

The gipper needs a win.  That's why.

Sudden Debt's picture

300k people is actually 0.3% of the workforce in America. Does that mean unemployment is down to 6% if you kick out the setteler unemployed?

Smegley Wanxalot's picture

Wait ... we are supposed to be surprised when they lie???

Nid's picture

If one tells a lie enough times....

newsguy68's picture
And you thought it was a coincidence that bankers are mysteriously ending up dead everywhere! Wall Street Hit Teams Fully Operational, 3 Dozen Banksters On Hit List http://govtslaves.info/wall-street-hit-teams-fully-operational-3-dozen-banksters-hit-list/
Four chan's picture

my part of the country was in a deep freeze i dont know what the hell this report is talking about.

orangegeek's picture

Retail is contracting (JC Penney and Sears are about to go tits) and many are getting cut - Best Buy is cutting bodies big time, but it will likely stay alive.


Should be interesting tomorrow.

FieldingMellish's picture

Whatever the report says, it will be positive for stawks and negative for protection (VIX, gold, silver). The content does not matter.


Gold's continued rejection of the downward trend line will come to a head. $20-$30 drop tomorrow.

ebworthen's picture

With the markets unsteady they are going to make a nice batch of fudge with this report.

papaswamp's picture

....meh...Im going for a sluggish report. 80-90,000 max. Regardless, massive degrade in participaion rate.

NOTaREALmerican's picture

Re:  massive degrade in participaion rate

Just a result of the aging boomer retiring on the Big-OldFart benefits.

Between Big-OldFart, welfare, and the "massive" increase in worker productivity who needs to workers anymore?

FieldingMellish's picture

This myth has already been dispelled. The only actual growth in employment is in the over 55's. Its the 24-55yo segment that is hurting the most. No retirees (early or otherwise) there.

NOTaREALmerican's picture

Seasonally adjusted it will be fine, fine...

Come on, we had a few weeks of doomer fun.   Now it's back to the normal.

FieldingMellish's picture

Looking at the previous jobs reports from the past 18 major winter storms, the BLS has revised upward its initial estimate two-thirds of the time.


Incorrect by your graph. The figures were revised down 2/3rds of the time.

medium giraffe's picture

Agree, it was only revised upwards 35% of the time as far as I can see.  Good work Bloomberg...

Goldbugger's picture

I won't be surprised with MORE LIES... meahwhile 47,397,000 recipients on food stamps.

Flying Spaniard's picture

Dear US of A, are you as sick as you tell me? 

yogibear's picture

More people falling off the unemployment ranks and no longer looking or discouraged is a good thing for DC and Wall Street.

They have to do less adjusting.

Obama should shorten unemployment insurance from 6 months to 2 months, then the numbers really start looking good.

semperfi's picture

Tomorrow's jobs report would surprise only in the event it was TRUE and not made up to fit the propaganda script.

bankonzhongguo's picture

All of this bean counting is frivolous because the quality of these so-called "jobs" is poor.

Does anyone think a fraction of these "jobs" could support a family, let alone one person?

When the wages at Wal-mart, most agricultural and of course fast food jobs and other retail require the "employed" to also collect Obamacare, Section 8 and SNAP, then it is safe to say the US workforce is permanently and structurally impaired.

It does not matter if it's ADP, BLS, or Fed Shareholders, the Revolution will be televised everywhere except the Amerikan MSM.

CNN.  What an Orwellian tool.


hotrod's picture

I follow the Job boards on the internet and there has been a noticable decrease in the job listings starting in January.  The last quarter of 2013 had quite a few new additions every day.  January has stalled in comparison to other quarters from what I can see.  Also the seasonal hiring is over and those people are sent home. UPS hired tons for package delivery and those people are now done. Earnings season was not robust so I cannot imagine a hiring binge nor do I see it on the job boards. I do not know whether a major seasonal "adjustment" is made for January which always seem to falsely skew the numbers.    What metrics in the economy point to a barn burner employment report?  I cant think of any.

hotrod's picture


ISSA charges fake data scheme.  Maybe this will help them be more honest.

island's picture

No members of the 99% should be optimistic with the dropping labor force participation and the dropping Velocity of M2.

The phantom financial economy is just an illusion of the marketeers (the 1% and friends), as they pillage "the small people."

thismarketisrigged's picture

there is only one thing i am sure of tomorrow.


if the number is bad, its the weather.


if it is good, then its because our economy is thriving and will only get stronger.