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What Wall Street Expects From Today's Payrolls Number, And Why It May Be Overly Optimistic
The most important not yet double seasonally-adjusted economic datapoint is upon us: in 90 minutes the BLS will report the May payrolls number which consensus expects to rise by 225K, (range of 140K to 305K), barely unchanged from April's 223K. The meaningless unemployment rate is expected to remain unchanged at 5.4%, even as the number of people not in the labor force likely will rise to a new record high. The most important variable, however, will be the hourly earnings with consensus expecting a 0.2% increase for all workers (the non-supervisory workers category is a different story entirely), up from the 0.1% increase in April.
This is what Wall Street expects from the NFP print, by bank:
- UBS 205K
- Morgan Stanley 210K
- Goldman Sachs 210K
- Credit Suisse 220K
- JP Morgan 225K
- Citigroup 225K
- HSBC 230K
- Deutsche Bank 275K
Yet one wonders if Wall Street isn't overly optimistic as usual. As the following chart from @not_jim_cramer shows, based on recent regional employment surveys, the realistic print is far lower, if not negative.
Of course, correlation is not causation, but it goes without saying that a negative NFP print would send the ES promptly limit up, crushing the latest batch of 10Y treasury shorts in the process, as it would confirm what many have said, namely that the Fed is now locked into ZIRP and will be unable to raise rate into perpertuity... unless of course the only reason to hike rates is to send the US economy into a tailspin just so the Fed can then launch QE4.
Inversely, if Joe Lavorgna is right with his 275K print, and watch as the bid stack evaporates as even a June rate hike is once again back on the table.
Some more on the possible market reaction courtesy of RanSquawk:
A strong NFP reading coupled with sustained wage growth could see the US yield curve steepen if investors bring forward rate hike expectations. The USD-index may also resume its upward trend in the aftermath of a stellar jobs number, particularly given the recent weakness seen in the greenback. However, should payrolls miss on expectations, then expectations for a September rate hike could be reduced as investors push back the prospect of a Fed rate hike toward December or even next year. Of note, futures markets are currently pricing in a 62% chance of rate hike in December with a 27% chance of an earlier rate hike in September.
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Huh. I thought those were the bank lay-off numbers.
It's all FUBAR...................anyways you look at it
If you had 100% unemployment or employment the printing press would still keep running
The FREE money cookie jar's lid ain't never going back on
Is today the day we break the 93 million threshold?
Do you believe in miracles?
Other news
Goldman Sachs’ FX Analyst Dies June 4thhttp://armstrongeconomics.com/archives/31334
Retail Gold Sales Dropping Rapidlyhttp://armstrongeconomics.com/archives/31357
Retail Gold Sales Dropping Rapidly
Gold is dead.....finally after thousands of years.
VinceFostersGhost
Gold is dead.....finally after thousands of years.
Na.....................just taking a nap
getting ready for the sprint of it's life
Doesnt matter whatever the numbers are. It'll be 8.30 and...
It's...it's...it's HAMMER TIME!! MC Hammer style!
No those numbers are higher than this
I hopes the number is good so it sends rates soaring...The market will raise rates for the Fed.
That would be an interesting aspect...market running rates up above the Fed target. 'Someone' comes in and quashes rates every time they make a run up. The markets are so rigged now its pitiful.
They rise at night, and drop during the day, it's called the US manipulation.
The key areas... Particiaption rates in the different age cohorts, employment levels in the different age cohorts and part time vs full time. Additionally wages will be key. I expect some pop in wages due to McNasties et al raising for the burger flippers, but this came at the expense of many mid and upper level being laid off ( should impact median wages).
NFP typically begins to track closer to Gallup this time of year so I expect a rather mid range hiring, with unemployment holding steady or possibly ticking up a bit. But who knows what triple residual seanal adjustments might do.....
this chart was created with only SINGLE seasonal adjustment.
silly rabbits....we're on DOUBLE SECRET SEASONAL ADJUSTMENT now.....
On odd numbered days they don't lie.
To themselves.
OH.
It's a crap shoot. Policy driven.
rig it and done.
PULL IT!!!
If you spot Buffett suckling on a Popsicle before the release, employment is good.
If Buffet isn’t suckling a Popsicle, woe to market participants.
Nobody's has taken as good of care of their teeth as Uncle Warren, he proved it to himself and that's all that counts in Warrens world.
With colleges and universities unleashing thousands of unwary and deeply in debt student under achievers upon the lackluster working envoirnment of the U.S.A. one wonders how McDonalds and Burger King can absorb them all.
It is Wall Street's job to be overly optimistic. Fewer believe it anymore.
Let's think about removing "Normal" and "Rinse and Spin" cycles from all new washing machines. One cycle: "Wash" to remain.
We should all just go golfing and get drunk 3-4 days a week. These pathetic markets have no depth. They just move from one major macro data point to the next, and drift aimlessly in between.
Maybe I'll become a part time fortune teller and set up a little stand next to the 19th hole at my local golf course.
Pro's always struggle with the putting so you might be on to something there.
And as with putting..."no one really cares about the number" just whether or not they've figured out their putting problem.
According to logic, nonfarm payrolls should be negative.
Logic will make you lose money, go long.
123k is just about right...
Wow, not such bad news after all? 280'000 added and 8 cents / hour wage growth. Maybe Wall Street wasn't too optimistic after all...