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Goldman's NFP Post-Mortem: A December Rate Hike Is Now A "Close Call"

Tyler Durden's picture




 

In addition to the Fed's credibility, one other privately-controlled organization that has seen its credibility completely crushed in recent months is the Goldman economic forecasting team (if not the team that "forecasts" Fed monetary policy, simply because Goldman controls the Fed and tells it what to do; as such what Goldman "thinks" the Fed will do is usually ironclad) whose Jan Hatzius "for what it's worth" forecast above trend growth for the US economy in 2014.

So, "for what it's worth", here is Goldman jobs report post-mortem (in a parallel report Goldman just cut its Q3 GDP forecast from 2.0% to 1.9%), in which the bank admits that the report was a disaster, and that as a result "we now see action at the December meeting as a close call."

1. The downshift in job growth continued for a second month, with nonfarm payroll employment increasing by just 142k in September (below consensus expectations of a 201k increase). Job gains for the prior two months were also revised down by a total of 59k. Private payroll growth increased by 118k in September, following a gain of 100k in August. The average increase in private payroll growth over the last two months of 109k has fallen well-below the 205k per month pace in the year through July. The slowing in private payroll growth has been fairly broad-based, with notable weakness last month in manufacturing (-9k), mining & logging (-12k) and financial services (flat). Government employment growth remained firm, rising by 24k.

 

2. Other details in the establishment survey were similarly downbeat. The average workweek declined to 34.5 hours, reversing its gain in July. Average hourly earnings (AHE) were unchanged on the month, and increased by just 2.2% from a year earlier. Although some weakness in AHE was to be expected based on calendar-related distortions, the result was below our forecasts which had taken these factors into account.

 

3. The household survey showed a decline in household employment of 236k (+269k on a payrolls-consistent basis). The U3 unemployment rate remained at 5.1%, but declined on an unrounded basis (from 5.112% to 5.051%), and the broader U6 underemployment rate fell three-tenths to 10.0% as a result of a large decline in involuntary part-time employment. The labor force participation rate fell two-tenths to 62.4%.

 

4. With payrolls, unemployment claims, consumer sentiment, vehicle sales, and a number of business surveys in hand, our preliminary read on the September Current Activity Indicator is +1.9%, down from the +2.7% figure in August.

 

5. In recent weeks we have argued that the FOMC is on a narrow path to liftoff in December—needing to see continued solid domestic growth, better inflation trends and easier financial conditions. At the moment we look to be off that path—domestic activity has slowed somewhat, and neither inflation nor financial conditions have improved—and we now see action at the December meeting as a close call.

Which, of course, should only come as a surprise to muppet clients: after all the same Goldman two weeks ago admitted that "our “GSFCI Taylor rule” suggests that the FOMC should be trying to ease rather than tighten financial conditions. Our own view in terms of optimal policy is quite strongly in favor of waiting well into 2016."

And what Goldman wants, Goldman gets, even if it means that now instead of a rate hike, the market should start pricing in the odds of a NIRP, or maybe even QE4, announcement in December.

 

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Fri, 10/02/2015 - 10:56 | 6620781 Looney
Looney's picture

Goldman’s “forecasts” should be used as a renewable energy source.

I hear that dried-up shit burns really gewd. ;-)

Looney

Fri, 10/02/2015 - 11:04 | 6620845 Tom Servo
Tom Servo's picture

Wish someone would put a slug in both of their craniums...

 

Fri, 10/02/2015 - 11:12 | 6620893 pods
pods's picture

Why put Lloyd out of his misery?

He is just starting out on the chemo train.

pods

Fri, 10/02/2015 - 11:14 | 6620914 Dr. Engali
Dr. Engali's picture

To put him out of our misery.

Fri, 10/02/2015 - 12:59 | 6621449 pods
pods's picture

Touce!

Fri, 10/02/2015 - 11:15 | 6620920 Money Counterfeiter
Money Counterfeiter's picture

Hell awaits that MF.

Fri, 10/02/2015 - 12:54 | 6621425 tc06rtw
tc06rtw's picture

  
 He may not get in…  I’ve heard it’s restricted.

Fri, 10/02/2015 - 11:17 | 6620935 caconhma
caconhma's picture

Seeing these two disgusting faces, the only right thing is to spit right into it.

Fri, 10/02/2015 - 11:18 | 6620945 Spitzer
Spitzer's picture

I wish he would take the same stance as Steve Jobs. Speed up the process.

Fri, 10/02/2015 - 11:14 | 6620913 Money Counterfeiter
Money Counterfeiter's picture

QE IV in the works AFTER Tiaa-cref sells and only then.  When the teachers unload the asset purchases resume.

Fri, 10/02/2015 - 10:55 | 6620783 ThirteenthFloor
ThirteenthFloor's picture

"We're in the money !" Banksters suck.

Fri, 10/02/2015 - 10:56 | 6620789 MFL8240
MFL8240's picture

Two of the biggest cons in American history!  

Fri, 10/02/2015 - 11:00 | 6620820 Colonel Klink
Colonel Klink's picture

I can only hope both those fukkers die a slow, painful, horrible death.

Fri, 10/02/2015 - 12:09 | 6621217 Crocodile
Crocodile's picture

Death is forever because it resides in an eternal state, which is the "absence" of time.

Fri, 10/02/2015 - 11:03 | 6620836 Dr. Engali
Dr. Engali's picture

The biggest con currently resides in the white house.

Fri, 10/02/2015 - 10:56 | 6620791 lehmen_sisters
lehmen_sisters's picture

I know people are stupid, but how much longer can people keep believing this shit? Can they say " rate hikes next month " for the next year? Fuck sakes.

Fri, 10/02/2015 - 10:58 | 6620803 ThirteenthFloor
ThirteenthFloor's picture

They got away with " the economy recovered for 7 years", this may go on a while.

Fri, 10/02/2015 - 11:06 | 6620855 Viffer
Viffer's picture

Here is an hour long version of Everyting is Awesome.  Watch and listen for the full hour and you too will believe we are in a recovery.

 

https://www.youtube.com/watch?v=cCKONHUigVk

 

 

Fri, 10/02/2015 - 12:08 | 6621210 Crocodile
Crocodile's picture

Did you see the message below the channel's name?  Making a 10 hour versionFind out where that chap lives and stay away from any "gun free" zones nearby especially if his mother goes door-to-door petitioning against cockroaches because her son doesn't like them; he might take an insanity break.

Fri, 10/02/2015 - 10:58 | 6620797 donkeyhaute
donkeyhaute's picture

how long until uncle warren announces his disease that will conveniently kill him when SHTF?

Fri, 10/02/2015 - 11:05 | 6620851 NubianSundance
NubianSundance's picture

He's has been dying from the same heart attack for the last twenty years. (Michael Corleone discusses Hyman Roth)

Fri, 10/02/2015 - 11:07 | 6620860 ebworthen
ebworthen's picture

Satan already has his soul, so that flabby husk could last - though it would be great if it was something quick and we didn't have to hear him say another word or see another stupid article about him on the low-brow financial rags.

Fri, 10/02/2015 - 12:04 | 6621184 Crocodile
Crocodile's picture

If Satan has his soul, then does Jesus have your soul?  It is one or the other...believe it or not makes no difference, for the truth always surfaces; usually when it is too late.

Fri, 10/02/2015 - 13:13 | 6621524 roisaber
roisaber's picture

Shut the fuck up with your Hebrew tainted religion.

Sat, 10/03/2015 - 12:47 | 6625224 ebworthen
ebworthen's picture

That is some weird shit right there, just sayin'.

Fri, 10/02/2015 - 10:59 | 6620805 Uncle Sugar
Uncle Sugar's picture

Moar QE maybe. 

Fri, 10/02/2015 - 12:59 | 6621452 Lost in translation
Lost in translation's picture

More QE, only called something/anything OTHER than QE.

"QE4?  What are you talking about?  We didn't do any more QE!"

Fri, 10/02/2015 - 11:01 | 6620825 NubianSundance
NubianSundance's picture

Punxsutawney Phil has more credibility than that bunch of wide boys.

Fri, 10/02/2015 - 13:14 | 6621531 The Once-ler
The Once-ler's picture

  
         …  and a nicer personality.

Fri, 10/02/2015 - 11:03 | 6620831 ebworthen
ebworthen's picture

This is so easy; if inflation is at 2%, put prime at 6%, then send every American $6 Million taxed at 10%.

We can put some in treasuries earning 8%, buy a house, a new car, send the kids to college, eat out more often and tip well.

Fri, 10/02/2015 - 13:27 | 6621559 tc06rtw
tc06rtw's picture

 

TOLD  you Donald Trump was on ZH!

Fri, 10/02/2015 - 11:02 | 6620834 BlackMagician
BlackMagician's picture

If you believe these liars you should have your head examined...what they meant to say was...No Rate Hikes + Negative Rates.

Fri, 10/02/2015 - 11:05 | 6620852 earleflorida
earleflorida's picture

http://news.muckety.com/2010/01/08/six-degrees-of-phil-gramm/23671?plnk

nov/1999 106th congress

hillary & bill your two presidential couple

Fri, 10/02/2015 - 11:09 | 6620870 youngman
youngman's picture

We will still be talking about a rate hike next year...not going to happen.....the next hurdle is a debt ceiling that they are going to hit early for some reason....I thought Obama fixed the debt problem...he said so....he fixed the deficit....so hes says

Fri, 10/02/2015 - 11:25 | 6620980 negative rates
negative rates's picture

You'll be scared stiff and froze by then, but keep hope alive for the tribe, denile is not just a river in Egypt.

Fri, 10/02/2015 - 11:09 | 6620874 SheepDog-One
SheepDog-One's picture

Wow this clown show is getting good now! LMFAO!

Fri, 10/02/2015 - 11:11 | 6620887 khakuda
khakuda's picture

Goldman wants MOAR?  No!  It can't be!

Fri, 10/02/2015 - 11:12 | 6620891 Not if_ But When
Not if_ But When's picture

JESUS !!!!!!!!!!!!!  Going by the market turnaround it looks like bad news is good news (still).

ZIRP and QE trump everything.  Amazing.

Get the F*ck out of the market 'cause common sense will wipe you out.

Fri, 10/02/2015 - 11:13 | 6620907 wmbz
wmbz's picture

There will be no rate hike, and these assholes know it.

Being the *perverts that they are, they love jerking people around, because...they can!

* Yes I know it gives perverts a bad name.

Fri, 10/02/2015 - 11:14 | 6620910 fowlerja
fowlerja's picture

I don't trust Lloyd Blankfein...he has done so many underhand deals...wait..what's this...look at the picture...where is his left hand...ugh..

Fri, 10/02/2015 - 11:28 | 6620998 e_goldstein
e_goldstein's picture

I'm sure Warren's first thought was:

"What's Becky doing behind me?"

Fri, 10/02/2015 - 11:29 | 6620996 Chuck Knoblauch
Chuck Knoblauch's picture

How's that Lymphoma cancer, Lloyd?

Still eating you up inside?

Fri, 10/02/2015 - 11:28 | 6620999 hangemhigh77
hangemhigh77's picture

Hey Lloyd here's hoping your cancer kills you slowly and very painfully. And when your suffering here on earth is over I hope you rot in Hell and burn for an eternity. Have a nice day

Fri, 10/02/2015 - 11:58 | 6621158 Crocodile
Crocodile's picture

Neither Jamie or Lloyd had/have cancer; they only wanted to help "special" clients grab some money by shorting the company prior to the announcement; when the CEO of a major cartel bank makes such an announcement, the stock of that company takes a temporary downward hit.  Magically both will be cured as Jamie already has received the miracle; thus no evidence of real treatment and neither will there be of Franknstein.

Fri, 10/02/2015 - 11:30 | 6621010 hangemhigh77
hangemhigh77's picture

Hey Warren I hope you choke on your next ice cream cone you piece of shit.

Fri, 10/02/2015 - 11:35 | 6621034 hangemhigh77
hangemhigh77's picture

Everytime I look at either of those bastards I have to take a shit.

Fri, 10/02/2015 - 11:52 | 6621133 Budnacho
Budnacho's picture

"Involuntary-Clench"

Fri, 10/02/2015 - 12:00 | 6621164 Crocodile
Crocodile's picture

Buffet's left hand looks reptilian and I would know; I deny any relation.

Fri, 10/02/2015 - 12:11 | 6621227 nakki
nakki's picture

Odds of QE 6 before 1% FED FUNDS rates.

25%

100%

Fri, 10/02/2015 - 17:58 | 6622899 Elio
Elio's picture

Forget about rate increase. I really think there is some back door QE  ( not official to the public) going on since the end of summer.

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