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NFP: Bring Da Noise, Bring in Da Funk

Posted By Barry Ritholtz On July 2, 2010 @ 7:11 am In Employment | Comments Disabled

Today, we are expecting a very noisy, very funky NFP report. That is what the “N” and the “F” stand for in this NFP report: Noisy & Funky

Last month, we noted how much the Census data was skewing employment reports. The Labor Department had hired ~417,000 more census workers, and that was skewing the numbers. We even said you could see a crazy number, as high as ~700k [1], and you should ignore it.

The next few months is the unwind of the census hiring. Bloomberg’s survey of economists had a median estimate of a payroll declined of 130,000 in June.¬†Ignore that as well.

Given all the noise, these estimates are little more than a wild-assed guesses. The reporting week for NFP does not fit in precisely with the Census layoffs, and so we could see a payroll report plus or minus 250k around that number. Anything between plus 100k new jobs and minus 400k should not surprise traders (but probably will).

One last trader’s caveat: Expectations for this report have been continually ratcheted down this month. Whisper numbers are for an awful data point. Hence, anything less than horrible number could spark a relief rally.

Its all about the noise . . .


BLS release at 8:30am [2]

Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2010/07/nfp-bring-da-noise-bring-in-da-funk/

URLs in this post:

[1] high as ~700k: http://www.ritholtz.com/blog/2010/06/nfp-forecast-700k/

[2] BLS release at 8:30am: http://www.bls.gov/news.release/empsit.nr0.htm

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