Non Farm Payroll Day (Feb 09)
You know its been a wild week when the monthly NFP is almost an afterthought to the action.
According to Barron’s, consensus for Nonfarm Payrolls M/M change is a loss of -648,000; the range of estimates was -800,000 to -500,000
On Unemployment Rate, the consensus is a bump to 7.9%, and a range from 7.8% to 8.1%.
Under the best of circumstances this is a highly imprecise number that typically overstates job creation, and lags the overall economic cycle.
My best guess is that we will see an 8% handle on unemployment, 750k actual number, which will look like a 670k which will then get revised down closer to reality next month. Expect last months numbers to also suffer a negative revision.
The real question to traders is whether this is already reflected in equity prices.
I am constantly perplexed when each and every horrific data point is greeted as a big negative surprise by people who I can only describe as clueless cave dwellers. Given the nature of NFP, you should not be surprised by any number between -500k and -1M — they are that hard to pin down in real time via current methodologies.
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UPDATE: Mat 7, 2009 7:49am
I see Floyd Norris is also hip to the revised down stuff. On Friday afternoon, he quoted Robert Barbera, chief economist of ITG, who noted:
August 2008: Initially 84,000, revised to 175,000
September 2008: Initially 159,000, revised to 321,000
October 2008: Initially 240,000, revised to 380,000
November 2008: Initially 533,000, revised to 597,000
December 2008: Initially 524,000, revised to 681,000
January 2009: Initially 598,000, revised to 655,000
February 2009: Initially 651,000, as released today.
My guess is Feb ‘09 gets revised down to my -750k number –or worse . . .
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BLS data released 8:30 am
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January 2009 NFP Data
March 6th, 2009 at 7:13 am
Wow, Peter Yastro on CNBC discussing the dramatic drop in profits as the cause of the labor and market falloff.
Go figure . . .
March 6th, 2009 at 7:49 am
It’s the Captain Renault style of analysis: being shocked – shocked!. Yet the Inspector Closeau(s) will always find the mustard seed hidden in the data.
We’re all French now.
March 6th, 2009 at 8:01 am
Recall that many people have seen so much cheerleading on CNBC and other outlets (perhaps less more recently) that they have been led to believe that things are just in a rut waiting to turn around. And there are a lot of mixed messages out there. Some recently criticized the administration for not being positive enough — (being too… honest or realistic? Oh my!). And other invstors with money at mutual funds companies and with some advisors are being told that this, like all recessions will just turn the corner in a little bit of time… wait for it… wait for it…
Anyway, with intentional mixed messages (and bottom calls) in some cases purposely designed to keep investors invested, it’s no wonder than many are confused, surprised and hurt when the market goes down, yet again.
March 6th, 2009 at 8:13 am
Feb Payrolls are expected to decline by 650k, the biggest since 1949 but adjusted for population growth the direct comparison is useless. Either way, like a boxer knowing he’s about to get a stiff upper cut, the market is anticipating an ugly number as evidenced by the 7% drop just this week in the S&P’s. The unemployment rate is expected to rise .3% to 7.9%, the highest since 1984. The augmented unemployment rate, which includes ‘job wanters’ (those that aren’t actively looking but would take a job if offered), should move above 11% from 10.8%.
March 6th, 2009 at 8:30 am
well down 651, and there’s those revisions.
March 6th, 2009 at 8:35 am
krice2001 makes a good point w/:
“Recall that many people have seen so much cheerleading on CNBC and other outlets (perhaps less more recently) that they have been led to believe that things are just in a rut waiting to turn around. ”
“Anyway, with intentional mixed messages (and bottom calls) in some cases purposely designed to keep investors invested, it’s no wonder than many are confused, surprised and hurt when the market goes down, yet again.”
these, recent, CNBC koffee klatches seem like Parodies..’false contrition’ is the descriptive that keeps back to mind…
I think I’m suffering, hopefully temporary, cognitive impairment, just from viewing it..
LSS: may CNBC go quietly into that good night, and soon..
March 6th, 2009 at 8:41 am
yup, look at those revisions. You know it’s going to be revised even higher next month. Revise an earlier month even higher, so you can report under it. What a racket. Pure Banana Republic stuff, toxic to credibility.
March 6th, 2009 at 8:43 am
B/D added 134K jobs? Leisure and Hospitality +35k? Business and professional svcs +36k?
March 6th, 2009 at 8:49 am
Amen, these subsequent revisions always produce numbers 30-40% higher, read 650K jobs and translate that to 850K when the dust settles in May
March 6th, 2009 at 8:51 am
Could we have a 1M job loss month? If this month is truly 850K after two waves of revisions, it would require a 20% increase. I feel we’re close to the top now.
March 6th, 2009 at 9:18 am
Imagine if we ‘revised’ our checkbooks the same way the BLS, et al. revised their #’s..
funny thing is, most peep would, readily, call that “Fraud”, while many still spin excuses for our vaunted Gov’t, and its #’s..
Equality under the Law was a good idea..
March 6th, 2009 at 9:22 am
Barry Writes:
“I am constantly perplexed when each and every horrific data point is greeted as a big negative surprise by people who I can only describe as clueless cave dwellers. ”
Me too. Wouldn’t it be great to see their faces if you showed them ShadowStats figures (18%) or explained to them that the number of unemployed, discouraged and workers who are under employed figure is north of 20,000,000?
FSN had some good articles on this, but they are down.
http://www.financialsense.com/editorials/quinn/2009/0303.html (ShadowStats unemployment chart)
http://www.financialsense.com/editorials/cooke/2009/0122.html (north of 20 million article)
Take care
March 7th, 2009 at 9:54 am
Your list of initial and revised statements of layoffs above highlights what I consider to be a major methodological problem with BLS numbers: By comparing the current initial figure with last month’s revised figure, BLS consistently UNDERSTATES the monthly change in layoffs. It is an apples to oranges comparison. The revisions consistently INCREASE the previous month’s count of lay offs, thus making the lay off number and increase smaller than it is.
Having counted these lay offs monthly for decades, BLS should be able to develop a reasonable statistical estimation process for making the appropriate adjustment in its initial data release. The problem is the resulting numbers would be politically unpalatable.
FWIW–My guess is that next month’s revised data for February will show lay offs topped 700,000 people.