This page has been archived and commenting is disabled.
The Last-Minute NFP Preview: What Wall Street Expects (And Did Hilsenrath Just Warn Of A Miss)
With the non-farm payroll report due in just 30 minutes, here is your last-stop summary of what Wall Street is expecting from today's most important data release (for a more in-depth report of what Goldman is looking for, read here).
The big consensus picture:
- July Payrolls expected to increase by 225K (range 140K to 310K), June was 223K, May 280K
- Unemployment rate Expected at 5.3% ((range +/- 0.1%), same as June, and down from May's 5.5%
- The most important data: average hourly earnings +0.2% (range +/- 0.1%), up from 0.0% in June
The expectations by bank are as follows:
- Morgan Stanley: 200K
- UBS: 205K
- BNP Paribas: 210K
- HSBC: 214K
- Bank of America: 215K
- Goldman Sachs: 225K
- Deutsche Bank: 235K
- JP Morgan: 240K
The visual histogram:
RanSquawk's preview:
July's nonfarm payrolls will be in strong focus following the FOMC rate decision last week with comments that an increase in interest rates will occur following "some further" improvement in the labour market. The consensus is looking for a small increase on the previous figure at 225K with unemployment forecast to remain unchanged. Unemployment previously fell which was attributed to employees leaving the workforce. Furthermore, both the monthly and yearly average hourly earnings figures are expected to rise on their previous release.
Analysts are highlighting the components of the report as crucial, which include the pace of jobs gains and income increases. Furthermore, the majority of analysts state that a figure below expectations could result in September no longer being considered for rate lift-off. Also noting that US challenger job cuts came in at 105.696K vs. prey. 44.842K, with the majority of those cuts coming from the military sector.
In terms of the recent labour data, continuing claims have risen off of their multi-year lows which could create concern for the Fed yet the employment component of ISM non-manufacturing printed 59.6 against June's 52.7. However, Wednesday's ADP release failed to meet expectations at 185K vs. Exp. 215K alongside revisions for July falling by 8K to 229K which could cause additional concern for the state of the labour market.
What a likely market reacttion would look like:
A strong NFP reading alongside increase in average hourly earnings could see the US yield curve steepen as investors affirm September as viable month for rate lift-off or generally bring forward rate hike expectations. The USD-index is likely to rise higher on the back of a good figure helping to maintain the upward trend. However, a miss on expectations is likely to cause investors to push back rate hike expectations after the mixed data out of the US, with December looking like a more likely date. Of note, futures markets are currently pricing in a 46% chance of a rate-hike in September.
Bloomberg's tracking of Twitter estimates shows a drop in recent expectations:
And what may be most concerning for the economic permabulls is the following tongue in cheek warning from Hilsenrath:
A Bad Jobs Report Still Might Not Shake Fed’s View
The Labor Department’s estimate of payroll increases also leaves the central bank with a fairly wide berth before officials second-guess their views. Payroll gains have averaged 208,000 a month so far this year, 245,000 over the past year and 220,000 over the past three years. Anything within that range presumably would live up to the Fed’s recent assessment that the job market is producing “solid” job gains.
At the same time, numbers outside of that range seem unlikely to create much alarm without other confirming evidence that the overall trend is changing. Monthly payroll employment estimates are volatile. In the past 12 months, they have varied from 119,000 to 423,000. Looked at another way, the standard deviation of monthly changes over the past year is 75,000; that means that two-thirds of the time, payroll gains have been between 170,000 and 320,000.
A miss of, say, 150,000 on payroll growth from the consensus estimate might seem like a big deal at first glance. But in an economy with 142 million overall payroll jobs, a miss of 150,000 is a little more than one-tenth of 1%.
At the end of the day, however, only one thing really matters: the X-13 Arima seasonal adjustment model, aka the goalseeking process leading to whatever the final number should be.
»
- 14451 reads
- Printer-friendly version
- Send to friend
- advertisements -
two hockey sticks
up=manipulated gov stats
comods=upside down
which one fortells the future
i want to believe, ha lol...
i want to believe
I said that earlier......boy did I catch hell for that.
could i get the special of the day? deflation with a side of inflation?
Any chance that negative interest rates will go along with negative unemployment numbers?
I would say there's a chance of that.
X12-ARIMA
at least they gave it a cool name. Kinda like HAL-9000
NoVa
You do know HAL-9000 was a joke name poking fun at Big Blue and Burroughs (Who!?)
Obama is counting the votes. The number will be whatever makes him look good. Unemployment will decrease by .1%, 246.5k jobs will be created. Details will be form fit.
Reality does not exist.
No one cares because no one believes this Bullshit. 25% unemployment is closer to reality!
Lying sons of government bitches.
The number will tell us one of two things - does Wall Street want a Fed rate hike in September?
The number will be luke-warm....or a blow out.
YEP, I was spot on! 215K.......This is all made up people!!
it never ends as if there numbers are not completly controlled by FED.. ie some weak parts some strong parts.. there hasnt been a clear number for years now .. either payrolls are weak, or some component is weak offsetting the number. because ie strong payroll but weak wage data or vis versa.
The fact is US./Jpn/ souther Europe are broke they cant pay the debt ever wihtout restructure, before Obama US debt to GDP was 65% now its above 100%..
So rates are not about the economy their about the debt..
X13 ARIMA for Prez!
BTW which is good news - a "miss" or a "beat"? I didn't see that.
Well, I'm going with beat. They need to raise rates, just so they can cut them again.
Oh, and with all the questionable news lately, they need a very positive unemployment number to muddle it all up. Remember, baffle with bullshit.
do oil company layoffs count? ha
No.......no they don't.
prediction:big miss and new reason to push off rate hike. wew, didn't see that coming, ha...
if the fed wants to raise rates then a strong number will be found. If it still wants to print, then weakness. If neither, then muddled bullshit. I bet on strong bullshit. The appearance of being willing to raise rates, aka whatever it takes.
Things are looking up
http://www.dailyjobcuts.com/
Americans will soon find out what living standards they want to choose.
Till then get laid, party and share the wife/boyfreinds
Maybe OT, but did anyone notice the death cross in the YM?
will you believe the numbers when they come out, anyway?
These numbers are so manipulated as to be irrelevant.
Yet, the market will undoubtably make a big move based on the number(s).
It's all garbage. Just like the inflation numbers and GDP. Valueless.
215k vs 225k expected.
Looks like the FED will be Holding in September.
I'm still trying to figure out what the Shemitah is going to be...I want to take "natural disaster" in the Shemitah Pool...it's the only thing that hasn't happened yet!