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Payrolls Preview: Goldman Warns Of "Seasonal Tendency To Disappoint Consensus"
Against a consensus expectation of 215,000, Goldman forecast a 230,000 increase in September nonfarm payroll employment and a one-tenth decline in the unemployment rate to 6.0% (vs. consensus 6.1%). Overall they think the available employment indicators for September point to a solid report, despite slightly weaker data this week. In addition, the reversal of a couple of special factors from August should be a positive. If history is any guide, however, regarding downside risks, there has been some seasonal tendency for September payrolls to disappoint consensus.
Recent Data is more negatively biased... (via Bloomberg)
Via Goldman Sachs,
We forecast a 230,000 increase in September nonfarm payroll employment (vs. consensus 215,000). This would represent a substantial pickup from August's 142,000 gain, pushing us back towards our view of the underlying trend and placing the payroll numbers back in line with the broader dataflow.
Arguing for a stronger report:
Solid business surveys. The employment components of all business surveys we track remained in expansionary territory in September, with most at fairly strong levels. Relative to August, six of twelve moved up, while the other six moved down. With respect to national (rather than regional) surveys specifically, ISM manufacturing employment moved down in September, but Markit manufacturing employment and Markit services employment advanced.
Claims continued to move down. The four-week moving average of initial jobless claims moved down by 6k from the August reference week to 295k.
Bounce-back from grocery store work stoppage. Although not technically classified as a "strike" by the Labor Department, work stoppages at Market Basket grocery stores resulted in a drop in food and beverage retail employment in August, which underperformed the twelve-month trend by about 21k. We would expect all of this effect to reverse in September.
End of auto shutdown distortions. Last month, durable manufacturing employment fell short of its twelve-month trend by about 10k, as seasonal adjustment volatility associated with smaller-than-normal July auto plant shutdowns distorted the August gain. We expect a more normal contribution from manufacturing in September. Although the ADP report was broadly in line with expectations for September—and has generally been of marginal use in predicting payroll employment more broadly—it did show a strong gain in manufacturing employment.
Arguing for a weaker report:
Seasonal bias. Historically, there has been a tendency for September payrolls to fall short of consensus expectations. This occurred in twelve of the past seventeen years. This could potentially be due to systematic differences between early and late survey responses by industry, which would not be captured by the seasonal adjustment methodology. While the average historical miss has been about 40k to the downside, over the past three years the average miss has been about zero.
Labor differential worsens. The Conference Board's labor differential—the net percent of survey respondents reporting jobs are plentiful vs. hard to get—worsened by 2.6pt in September to -15.0.
Casinos run out of luck. The recent closure of three large casinos in Atlantic City (two of which occurred before the September reference week) might be expected to reduce payroll employment by around 5,000 jobs.
On top of the September numbers themselves, we think a positive upward revision to the past two months of data is likely. The September report has had a strong seasonal tendency to include positive back-revisions, with the average revision +42,000 over the past ten years and +65,000 over the past three years. As a result, we would not be surprised to see last month's 142,000 revised up to something closer to 200,000, which would provide reassurance that the trend in job growth has not deteriorated significantly.
We also update our payrolls forecast "distributions" for September. The median model forecast is slightly above consensus at around 225,000 (vs. about 240,000 in August). The width of the distribution widened somewhat from August, likely as models which place more emphasis on the recent slower payrolls trend increasingly disagreed with models placing more weight on the generally solid September dataflow. However, downside skew moderated slightly. Purely model-based forecasts are also unlikely to capture the full extent of bounce-back from the end of grocery store work stoppages that we would judgmentally expect.
Exhibit 1. Distribution of Payroll Forecasts
With respect to the unemployment rate, we anticipate a decline of one-tenth to 6.0% on a rounded basis (vs. consensus +6.1%). We do see a substantial risk of the unemployment rate remaining unchanged, in light of the "firm 6.1%" starting point for August (6.1497% on an unrounded basis). Nonetheless, the risk on the participation rate is probably still slightly to the downside, and employment growth according to the household survey was somewhat soft in July and August, affording the possibility of a strong gain in September.
On average hourly earnings, we expect a trend-like gain of 0.2%, in line with consensus. This would push the year-on-year rate up slightly, to a still-subdued 2.2%.
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Finally we offer this 'humor' from CNBC... winning in the new nominal vs real normal...
#winning pic.twitter.com/zkG27gw4a1
— Rudolf E. Havenstein (@RudyHavenstein) October 2, 2014
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Mr. Yellen will need to restart the presses, again.
Moarrr clandestine.
Surprise! It's airborne transmissible! See last paragraph in quotes.
So now there's this (after confident assurances by the CDC that they're absolutely confident containment will be successful:
http://thehill.com/policy/healthcare/219626-officials-clam-up-about-ebol...
Health officials clam up about effort to contain Ebola in Texas
By Elise Viebeck - 10/02/14 04:33 PM EDT
"Health officials are refusing to answer growing questions about their response to the first Ebola case in the United States."
Under intense questioning from reporters, officials with the Centers for Disease Control and Prevention (CDC), the Texas health department and the City of Dallas repeatedly declined Thursday to provide details about the steps being taken to prevent an outbreak."
I especially like this gem:
***Frieden also said that, in theory, a sneeze or cough could spread the virus from someone experiencing Ebola symptoms. Officials had previously downplayed this possibility, focusing on direct contact with bodily fluids."***
SURPRISE!
Nice catch. Perception management/panic protection full frontal. Link is here:
http://thehill.com/policy/healthcare/219626-officials-clam-up-about-ebol...
perfect..
http://www.youtube.com/watch?v=84zY33QZO5o
This is the type of stuff where I lose it with the MSM shithead water carriers and just say WTF??
The reporters can give "intense questioning" to Texas health officials and NFL comissioners but they are somehow incapable of intense questioning of POTUS or the FED about Benghazi, rise of ISIS, failure of the economy, Wall Street crimes, lack of jobs, IRS targeting, Fast and Furious gun-running, illegal refugeeism, VA vscandals, blanket domestic surveillance, etc., you know, the big things that have mattered over the last 6 years....
...9/11...last 15 years.
Zzzzzzzzz. G'night all.
PUSSY
No Debt ( Supercharged/Pontiac) Grand National
Ohh Yeahh... This should be good. I can't wait to draw some charts.
Bring it bitchez. Earth to EKM?
EKM is good at clearing RATS out of ventilation ducts/ He's not so good at drawing charts.
Goldman always lies.
Man, This shit get's better by the second.
Blow the tanks, This U-Boat has been torpedoed!
"Goldman this" and "Goldman that"...
It truly can not be long before a sufficient number of well armed (chainsaws, swords--for beheading, automatic weapons, explosives of all shapes and sizes, attitudes that don't shy away from public exhibitions) TRUE patriots--aka, non-psychopaths who could either walk by Wall Street cretans or burn them alive--come to the valid conclusion that valuing "Goldman says this" and "Goldman says that" is absolutely no different than "The Fuhrer says gas these fuckers" then "gas those fuckers"... Sadly, it will be much too late a realization.
Goldman is a mass murderer of the technological kind. Hitler had 1940's technology, implemented in an effort to extract whatever the psychopathic mind desired; Goldman has gigabytes by the second, the NSA, and the Federal Reserve to render its targets.
And the great tragedy: If the sane were insane, they would understand what must be done with those who are unfit for this world. Thus, the psychopaths will bring death to us all.
remember, first you pillage, then you burn.
an unemployed court jester is no one's fool
THEY will just make up whatever number they want.
This entire "economy" has become a joke.
Whocouldanode? The market has a historical and seasonal tendency to crash in Octobers.
<---- Ebola (Red)
<---- Global Government (Blue)
What's going to kill you first?
If only jobs were as easy to produce and spread as Ebola
FYI: The survey is a trick question. I thought as a final goodbye I would give those of you that are not awake one final fake choice to vote Red or Blue. Your ballots go right in the garbage. Just like Scotland.
https://www.youtube.com/watch?v=kB50VEsyqEg
Have no fear. The Global government has presented you with the problem and the New World Order's Final Solution.
Patent, release and aid the spread of Ebola and then it is a race to bottom for global depopulation
https://www.google.com/patents/US20120251502
https://www.google.com/patents/CA2741523A1?cl=en
Georgia Guide Stones here we come
Voila. No more need for jobs reports. Whoever is left will be employed burying the dead. Full employment. Utopia at last.
The overnight futures are levitating for lack of macro. What a fucking joke! DOW up 50+