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Previewing The "Most Important Jobs Report Ever" - What Wall Street Expects
Perhaps one of the most notable features of the upcoming nonfarm payrolls report - which those with a flair for the dramatic have once again dubbed the "most important ever" simply because it may greenlight (or not) a Fed rate hike (any NFP print at 230K and above likely assures a September move by the Fed - which Wall Street consensus sees rising by 217K in August (although with Goldman a far below consensus 190K, and Wall Street's biggest cheerleader Joe LaVorgna predicting only 170K one has to wonder) is just how hard the punditry is trying to talk it down, with everyone from Joe LaVorgna to Bloomberg explaining why it is very likely that - due to seasonals only, and nothing but seasonals - it will be a weak report, only to be revised higher.
As Bloomberg reminds us, the August NFP has on an average missed economic forecasts by an average of 55k since 2000. The median has been 68K below ests in Bloomberg survey. Worse, it has missed ests 11 of last 15 times, which supposedly confirms some seasonal bias, not that economists are lousy forecasters. In past 18 years, it came below estimates 14 times.
Visually:
So with that caveat out of the way, one which supposedly will seek to ease the blow of a weak number, even if a weak number is precisely what Wall Street demands so the September rate hike is delayed to December or into 2016 and later, here is a snapshot of what all the big banks expect:
- Deutsche Bank - 170K
- Goldman Sachs - 190K
- UBS - 195K
- Morgan Stanley - 205K
- HSBC - 229K
- Bank of America - 200K
- BNP Paribas - 230K
- JPMorgan - 253K
Some further thoughts from RanSquawk on the consensus, how the market may react to the number:
- US Change in Nonfarm Payrolls (Aug) M/M Exp. 217K (Low 130K, High 253K), Prey. 215K, Jun. 223K US
- Unemployment Rate (Aug) M/M Exp. 5.2% (Low 5.1%, High 5.5%), Prey. 5.3%, Jun. 5.3%
- US Average Hourly Earnings (Aug) M/M Exp. 0.2% (Low 0.1%, High 0.4%), Prey. 0.2%, Jun. 0.0%
August's nonfarm payrolls release will be in strong focus ahead of the FOMC rate decision on the 17th September which is still highlighted as a potential date for rate lift-off. Furthermore, it does follow comments over the weekend at the Jackson Hole Symposium from the likes of Fed vice-chair Fischer (Voter, Soft Dove) who stated that the first rate-hike would come when there is "some further improvement in the labour market". Fischer went on to state that it was too early to make a decision on the September meeting. The consensus is for a slight increase on the previous figure at 218K with unemployment expected to fall 0.1pp to 5.2%. Also of note, both the monthly and yearly average hourly earnings figures are expected to remain unchanged at 0.2% and 2.1% respectively.
The recent labour data has been relatively disappointing; the ISM manufacturing employment component came in slightly below previous at 51.2 vs. Prev. 52.7 with ISM non-manufacturing employment at 56.0 vs. Prev. 59.6. Additionally, Wednesday's ADP release came in below expectations at 190K vs. Exp. 200K yet it was still above the previous which was revised lower to 177K. These figures could however suggest some slight disappointment from a Fed perspective, as they continue to look for some further improvement in the labour market. Thursday's initial and continuing jobless claims both came above expectations at 282K vs. Exp. 275K and 2257K vs. Exp. 2253K respectively.
Analysts state that the ADP results are in-line with an economy currently on a 2.0%-2.5% growth path, with limited emphasis being placed on the ADP figures due to being continuously revised. Furthermore, it is worth noting that in the last four August's, the ADP release overestimated the private payrolls release by 67K on average. Analysts have also stated that the recent decline in the US stock market, due to fears of a slowdown in China, have made it hard to distinguish between what was a business cycle reaction or something more fundamental.
Market Reaction
A strong NFP reading alongside the lower unemployment figure is likely to raise expectations of rate-lift off this month and is likely to result in some steepening in the Eurodollars curve. Additionally, the USD-index could strengthen off the back of a good figure and maintain the recent upward trend. However, a miss on expectations could see investors push back rate-hike expectations for the year to either October or December. The market is currently pricing in a 30% probability of a rate hike in September.
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All this talk and posturing and anxiety over a jobs report that is manufactured to suit the interests of Wall Street. The jobs report will be whatever Old Yeller wants it to be.
jobs report out: http://www.philiacband.com/propaganda.html
93 million people don't give a crap.
But we only had to treat one person badly for the whole thingy to go to hell, and we were hughly successful in that reguard.
Just a wild guess here, but I think that ANY number, good or bad, will be enough ramp stocks green. Just sayin'
Mr Beeks, is late in providing the jobs report- the duke brothers are not pleased..
Well according to the spammer whose sister is making millions of dollars a year at home on her laptop everything is greenshoots...so to speak!
On her Lap Top, not laptop. There's a slight difference.
True true ...sorry meant to say buttnutt! Or but nut ..well you get the picture(*)
In theory, so did the SnapChat and Rovio IPO in-crowds, YMMV.
Does twerking count towards GDP?
if only the stats could factor in the "quality of jobs" created...
oh, that is the hourly rate, ha-lol...
Many Americans say they are "retired", upon closer inspection you discover they are "disabled" and collecting a check. I guess that counts as not unemployed.
I know this for a fact because I often meet these people hiking, hunting, fishing, camping. Must be nice to retire early while you are so physically capable. Alas, I will probably have to work until I drop but I am glad to be supporting those with the good fortune to opt out at a young age. Lugging a rifle and jumping river rocks with a fishing pole is good therapy for the disabled.
A much better measure might be the labor participation rate.
Two days ago, I was talking to my neighbor over the back fence. Her husband just retired at age 62. Now she is going to 'retire' at age 50. She said her disability claim was "looking good".
Get out of that 401K soon or you will pay the price for not doing so, I know this for a fact too.
No "measure" is going to make a difference since they determine the measuring stick.
A better title to this article and all subsequent gov't report articles should be " New Fake____report due out this afternoon, wonder what the gov't wants us to think this month?"
A bit off topic: Anybody reading Krugmans blog?
...ok.
I didn't think so.
But check out his last one from September 2....
http://krugman.blogs.nytimes.com
And here what he is really thinking:
http://www.denk-bubbles.com/plebs
Fuck sKrugman, here is telling the chimps in Australia 'They can Weather The Storm'... the comments are priceless..LoL
http://www.theguardian.com/business/2015/sep/04/paul-krugman-australia-c...
Payroll will be good.
If its not good.
It will be better than expected, even if its bad.
If its bad, it will be pushed as "it coulda been worse, so its good"
For better or worse, it's only different, just sayin.
It will be good.....just fake.
Good enuff for talking heads but not enuff for a rate hike and the market soars.
I perceive thee to be a prophet sir.
I hear inventory control personnel are in high demand. Companies have to figure out were to put all the stuff that isn't selling.
100% OFF SALES!
(here we come)
http://iamsully.com/?p=14936
The numbers will reflect FED adgenda not the other way round. No rate rise now but for sure in Dec. Kick the can a few more months.
The fake number suspense is killing me
Just act surprised and yell REVISE!
It's soooo real ...
(like Caitlyn Jenner's vagina)
As the Borg used to say: "You will be assimilated." I say to the jobs report: "You will be manipulated."
Expect the word 'unexpected' to be in the report.
Only in America can the rate of Americans NOT participating in the workforce increase and the unemployment rate decrease!