Goldman Expects "Solid" Payrolls Due To "Long Awaited Full Normalization Of Weather Effect"

Tyler Durden's picture

Here is what Bloomberg' survey sees as consensus for tomorrow's key data:

  • Nonfarm payrolls: +218,000
  • Private payrolls: +215,000
  • Unemployment Rate: 6.6%
  • Avg Hourly Earnings: 0.2% MoM, 2.1% YoY
  • Avg Weekly Hours: 34.5


Weather is the biggest factor, as Goldman notes...

We forecast a 220k increase in nonfarm payrolls in April, a touch stronger than the consensus estimate of 215k.


We expect private payrolls increased 215k (vs. consensus 215k).


Payroll gains now stand just shy of 200k for February and March and look poised to come in stronger in April. Notably, the employment components of all ten of the major business surveys released so far rose in April, in every case to a level consistent with increased employment. In addition, jobless claims reached a new post-recession low just prior to the April reference week, and continued normalization of weather conditions in April from a still-chilly March could provide a modest additional boost. We also think it is likely that the April report will include substantial positive back-revisions, as has tended to be the case historically.

Arguing for a stronger report:

The employment components of all ten major business surveys available so far improved in April. Among manufacturing surveys, gains were seen in the ISM manufacturing index (+3.6pt to 54.7), the Chicago PMI (+7.8pt to 57.8), and the Philly (+5.2pt to 6.9), Empire (+2.3pt to 8.2), Richmond (+4pt to 4), Kansas City (+3pt to 3), and Dallas (+4.7pt to 19.7) Fed surveys. While the ISM nonmanufacturing index is not yet available, the employment components of the New York Fed's service sector (+4.5pt to 6.2) and the Richmond Fed's service sector survey (+10pt to 6) both improved.


Weather conditions finally returned to seasonal norms in April. Much of the bounce-back from the unseasonably cold and snowy winter was already apparent in the March data. In particular, weekly hours rebounded strongly from disruptions caused by major snowstorms in the previous months. However, measured as the deviation from normal, March was the most unseasonably cold month of the winter, suggesting that some additional room remains for a further weather boost in April.


The four-week moving average of initial claims for unemployment benefits reached a new post-recession low during the April reference week, declining 18k from the March reference week. However, the Labor Department has cautioned in recent weeks that seasonal adjustment of weekly claims is challenging around the Easter holiday and spring break from schools.


Private job gains reported by ADP rose to 220k in April from an initially-reported March gain of 192k. That said, we attach only limited weight to the ADP report because its initial print has yet to prove itself as a reliable indicator of payroll job growth as measured by the Labor Department.

Both new and total online job ads rose modestly in April. While the series tends to be quite volatile and is a forward-looking rather than coincident indicator, it has printed at a decent level over the last few months.

Arguing for a weaker report

The labor differential?the difference in the percentage of respondents in the Conference Board's consumer confidence survey describing jobs as plentiful vs. hard to get?worsened by 2pt to -19.6 in April from an upwardly-revised March base. The index has shown a fairly steady recovery since late 2011, but has stalled in recent months.

Neutral indicators

Announced layoffs were up on a seasonally-adjusted basis in April, but only modestly, according to Challenger, Gray, and Christmas. The heaviest job cuts in April were seen in the retail and financial sectors. However, job cuts in the health care sector declined from March, suggesting at most a modest impact from layoffs of temporary workers at the end of the sign-up period for health insurance under the Affordable Care Act.

We expect that the unemployment rate declined to 6.6% in April (vs. consensus 6.6%) from an unrounded 6.71% in March. Despite strong employment gains in the household survey this year, the unemployment rate has held steady since December as a result of a 0.4pp increase in labor force participation. As we noted last week, the unemployment rate has recently fallen more quickly and the participation rate has increased more quickly among workers with lower education levels over the last few months.

Average hourly earnings (AHE) are likely to be in focus on Friday following several months of heightened attention to wage growth and labor market slack.

We expect an increase of 0.2% in April (vs. consensus 0.2%).


AHE for all workers were flat in March, likely reflecting the reversal of weather distortions that boosted the gain in February, and rose 2.1% over the past year. Even at this low growth rate, AHE have been rising more quickly than other wage measures. Wednesday's Employment Cost Index showed compensation growth of just 0.3% in Q1 (1.8% year-on-year) and wage & salary growth of just 0.25% in Q1 (1.7% year-on-year), and compensation per hour in the nonfarm business sector rose just 0.3% year-on-year as of 2013Q4.

And here are a smorgasboard of optimistic and pessimistic "economists" perspectives:

UBS's Sam Coffin: 150,000 — "Our forecast reflects a small boost from a residual weather-related rebound and some continued improvement in underlying trends, with a counterweight from unfavorable calendar effects... Within payrolls, incremental strength is likely in manufacturing, retail trade, and information industry payrolls—all of which had slowed, on balance, in recent months. The decline in jobless claims over the past month has been consistent with some labor market improvement.   We do see some drag from calendar effects. The gap between the March and April payroll surveys was four weeks. A four-week gap has been associated with below- trend April payrolls in 12 of the last 15 instances (and more recently in 4 of the last 5 instances). We put the downward bias for this month at about 20k and otherwise would have estimated April payrolls at 200k."

High Frequency Economics' Jim O'Sullivan: 185,000 — "...but we are allowing for the recurring pattern of payrolls being under-reported initially, only to be revised up later. Nor are we counting on any additional catch-up for weather effects. The household survey series on the number of people with a job but not at work because of bad weather was back to its normal level in March after being unusually high in February."

Citi's Peter D'Antonio: 225,000 — "We expect another solid gain in payroll employment in April, as the labor market normalizes from the weather distorted readings in December and January. By our estimates, this should be the last reading influenced by winter weather. At this point, we think the trend is still about 180K per month, but we do expect that the running rate will pick up this year toward 200K. Note 1: We can’t rule out that the tail end of the payroll rebound occurs through revisions, rather than a big rise in April. Last month, the headline gain was smaller than we expected, but upward revisions to earlier months made up the difference."

Deutsche Bank's Joe LaVorgna 240,000 — " data showed a new cyclical low for the employment survey period. This is a very positive sign for the labor market that is also being confirmed by the growth in employee tax withholding receipts."

Barclays' Dean Maki: 250,000 — "Both initial and continuing jobless claims have fallen significantly in April, suggesting a more robust pace of job growth than in recent months. We also believe more normal weather conditions than those prevailing earlier in the year will support job creation in April."

Morgan Stanley's Ted Wieseman: 250,000 — "Since the weather started to become less severe in mid-February, jobless claims have shown a big improvement that accelerated in the first half of April, pointing to a significantly reduced pace of firings recently. The 4-week average of initial claims fell to 312,000 in the survey week for the April employment report from 329,500 in March, and 336,500 in February, a seven-year low and very strong level historically. With layoffs declining, as long as hiring rates have at least held steady, net job growth has accelerated. We look for a temporary pickup to a pace moderately above the pre-winter trend near 200,000, reflecting some catch up reversal of winter drags."

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TammanyBrawl's picture


idea_hamster's picture

This is all bullshit.

I went to work every freakin' day this winter -- even when I was sick -- because the economy for us working stiffs is crap.

Goldman can "normalize" their Hermes ties up their own assholes.

knukles's picture

It'll be normalized for weather when hell freezes over

idea_hamster's picture

Gotta say, the trend is in the other direction.

I'm expecting heaven to melt and boil before Mamon can even see his breath.

666's picture

I don't give a flying f**k what the report shows, because I no longer believe anything the USSA government says. May those 535 rocket scientists lounging on the shores of the Potomac all rot in hell...

SoilMyselfRotten's picture

I'm hoping there's no blowout number so i don't have to hear for the next month, See!! See!! It WAS the weather.

MontgomeryScott's picture
Goldman Expects "Solid" Payrolls Due To "Long Awaited Full Normalization Of Weather Effect"

The title says far more than you think.

The next time your sky is turned sickly-white by the 'persistent contrails', and the weather gets all freaky (massive unprecedented storms, 6.000 lightning strikes in 15 minutes and TWENTY-FOUR inches of rain in SIX HOURS in Pensacola, FL. last weekend, for example), you may understand that Goldman-Sachs and OTHERS are simply bankrolling the 'normalization of weather'.

Yeah, I know, frikking tin-foil conspiracy theory.

Not quite.

Dick Morris on Sean Hannity, discussing how those 'conspiracy theorists' were right after all, back in '09:

There's far more in the overall agenda than you may realize (and NONE of it is beneficial).

BeerMe's picture

Even if it were to be stronger it is still complete shit.

TheRideNeverEnds's picture

Here is my call for tomorrow,


Number Beats- Market goes sharply higher as gold is hammered lower.


Number Miss- Market goes sharply higher as gold is hammered lower.

FieldingMellish's picture

That looks like a good trade with minimal risk.

Freedumb's picture

I always thought Keynesians would like bad winter weather because it damages property, or forces more consumption of heating oil, or employs more snow plow drivers/road repairmen and thus creates a tsunami of amazing menial labor jobs to replace all those high paying ones we've lost.

TammanyBrawl's picture

Oh right. Goldman put this out.
Let me just dig out my Goldman Analysis Contrarian Decrypter ring so I can determine who they are trying to sucker and/or screw by taking the opposite side of the trade they are advising.

buzzsaw99's picture

wieseman = the weather man


well they call me the weather man,

that's my name

i scan the snow reports

assigning economic blame


Well everybody'd like to have a what I got.

though it's cold outside my bonus is smold'ring hot.

I'm the weather man, that's my name...

[/george strait]

alfred b.'s picture


    No matter what the numbers....the unemployment rate will be  6.66.....after all they are brought to us by the evil community!


Father Lucifer's picture

What does it matter. It don't. Everyone is still looking for that bit of data that confirms there's a reovery, which tells me there ain't no recovery happening. So fuck it let's have some fun and start a fucking war somewhere.

kill switch's picture

Goldman Expects "Solid" Payrolls Due To "Long Awaited Full Normalization Of Weather Effect"

We need to do a rain dance and it will be 8.9 gdp

Hindenburg...Oh Man's picture

Walking into the jobs release tomorrow with a short position is something akin to walking into an already lit blowtorch on a pedestal, in a really big room, that you have to try really really hard to get in its way--but you can.

venturen's picture

why even have a BLS....just have Goldman make the annoucements directly!

QQQBall's picture

The BLS is a squid subsidiary

Atomizer's picture

Doesn’t this sound like ObamaCare??? Those fucking progressives think they outwitted the US public. Bang, bang.. Pathetic souls will die in carving the best interest in selling a retested effort to take over the United States of America.


Your entire family will die this time around. Thanks for all the security measures to firewall your protection. Begin shitting your pants, everyone is transparent.  Denial is a gunshot away.

PS: you lost control of your agenda. Watch how quickly it erodes.  Sadly, you and the UN have painted yourself into a corner. The liberism cult is DOA.

ms8172's picture

Will the real Bullshit artist... please stand up!!

new game's picture

and what will bonds do? equities up bonds up, wft ...

Tachyon5321's picture




Gee remember when the White House said the $823 billion stilimus program would create an economy that would generate 450,000 job a month.  

QQQBall's picture

215k vs 220k - get your dick outta my ass.

Atomizer's picture

How to Play the Simon Says, [Goldman Saks Game]

Otto Zitte's picture

GS is going to be disappointed. Tax season is over, but the Osama administration snatched every income tax return they could. There will be no spring. 

Bloody Muppet's picture

Bob is unemployed and applies for a job as a janitor at Microsoft. A manager at Human Resources interviews him in detail then asks him to wipe a few floors as a test. 

"OK," says the interviewer, "you're hired. Just give me your e-mail address and I'll send you the necessary documents."

Bob says that he doesn't have a computer, so obviously has no e-mail address. The Microsoft interviewer tells him that without an e-mail address he virtually doesn't exist, so the company is unable to hire him.

Disappointed and frustrated, Bob leaves the building with only 10 dollars in his pocket. He decides to go to the nearest supermarket and buy 10 pounds of tomatoes. He sells the tomatoes door-to-door and within two hours has doubled his capital. He repeats the process three times and ends up with 160 dollars.

Realising that he can make a living this way, Bob works hard from early morning to late at night. Every day, he doubles or even triples his capital. After a short time, he buys a small van, then a truck, and soon he has an entire fleet for his deliveries. 

Within 5 years, Bob has established one of the largest food retail chains in the US. He decides to think about his future and wants to get a financial plan drawn up for himself and his family. He contacts a financial consultant and they compile a pension plan. At the end of the discussion, the consultant asks Bob for his e-mail address in order to send him the corresponding documents, only to hear that Bob still does not own a computer and has no e-mail address.

"That's weird," says the consultant. "Mr. Paulson, you've built up a massive retail empire and you don't even have an e-mail address. Just imagine what you would have achieved if you'd had a computer."

Bob thinks for a minute, then says: "I'd be a janitor at Microsoft."

kurt's picture

Let me tell you about Goldman:

It was in the 80's I met this crazy girl at Sears. She had an in with management and couldn't get fired if she tried. Turns out she was the daughter of THE top broker. Well, we porked. She was kinda loose and complained about how her neighbor, a privledged boy of the same tribe, was a pervert who liked to try to put larger and larger things... well you get the picture. Anyway she said I had to get a job at the brokerage if she and I would be allowed to stay together. She arranged for me to have an interview. There was a flat topped tough guy interviewer who was supposed to clear me to be a trainee and introduce me to the ACTUAL MAN. 

I answered all of his questions to his satisfaction and said "I have one last question, are you a winner?" to which I answered, "Sometimes I am." Can I help it if I'm honest?

I was ushered out and got a call twenty minutes later from the girl, "We have to break up." CLICK!

kurt's picture

Fuck the Weather Effect

Let's Hear it for the Wealthier Effect!!!




fuck you poor boy... just die, ha ha ha!

Offthebeach's picture

I've thought of vertically integrating my van down by the the river activities. A paid news letter called, The Canning Report. This as roadside, returnable can collecting is a significant source of my, and millions, post industrial economy.

Anyhow, the weather warming has revealed a winter bonaza of cans and bottles. ( Thankyou Open Container/DUI laws ) . One has to be quick as spring growth is quickly covering up the harvest, plus the competition isn't sleeping in late and commodity prices are crashing as the harvest continues.

The Misses with the 29 hours at Dollar General reports more foot traffic from the carless now that the ever decaying asphalt remenants of roads are clear of dirty snowbanks and their disibility cains, walkers, mobility scooters can make it from the affordible/section 8/veteran/half way/parole housing complexs.

Many people seem with the welcome sunshine to be optimistic for improved legal settlements from their slip and falls, municipal steping off bus accidents, health clinic suits and bless his soul, our President's bonanaza to Americas Heartland, full SSI disibility.