Even in the age of Viagra, 3X is a bit much for a tired country not operating at full capacity. Yet that is what we are facing, with a third throw for the week, as we get non-farm payroll data at 8:30am this morning.

The report is likely to highlight the Fed’s jobs concerns, with Unemployment remaining sticky, near 10%. Unemployment has been at or above 9.5% since August 2009 — an unfortunate record since monthly NFP data keeping began six decades ago.

A Bloomberg survey of economists predicted that payrolls rose by 60,000; Estimates for the jobless rate ranged from 9.5 to 9.7%. Over the past year, hourly earnings grew only at 1.6%, and there is little expectation that wages will grow appreciably.

The best bet for gains will be the seasonal retail hiring. The Xmas ad blitz started early this year, beginning before Halloween. That implies heavy promotion, and heavier discounting.

The US has lost more than 8 million jobs this recession, making it the worst economic contraction since the 1930s. But there is a disconnect between the soft job market/weak economy and the rocketing stock market. This is confounding some people, as markets have hit their Pre-Lehman levels:

The belief that gains in the markets can improve the overall economy in a post-credit crisis environment is rather naive.

The focus on equity prices is a corollary to the Wisdom of Crowds, and the data supporting it is inconsistent at best.  There have been far too many instances in history of markets rallying 30%, 50%, even 125% — with economies failing to gain any traction.

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Employment situation is out at 8:30am

Category: Employment

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

12 Responses to “The Anti-Climactic NFP”

  1. postman says:

    Given the recent continuing melt-up, perhaps if the employment picture looks relatively good, stocks will rally on grounds of an improving economy. If the employment picture looks bad, stocks will rally because fiscal and especially monetary policy will be expected to be even more accomodative. I don’t know–but this thinking kept me from putting on a short SPY at yeaterday’s close.

  2. BR –

    I agree with you that “The belief that gains in the markets can improve the overall economy in a post-credit crisis environment is rather naive.”, however, is it not the case that the Fed Chairman is now doing this?

    From Ben Bernanke’s Op-Ed in the Washington Post:
    “And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.”

    further detail here
    http://alaricinvestments.blogspot.com/2010/11/if-you-only-have-hammer-everything.html

    If the Fed Chairman is targeting stock prices in some way, is it not understandable that most investors would simply follow through on this and buy, perhaps in the believe that they may protect themselves from the money printing coming?

  3. wally says:

    A lot of US corporations do a significant part of their business overseas and benefit from the booming developing economies and from a weak dollar. You’d expect those stocks to bear less relation to the US internal situation. Other corporations have done what they always do in recessions – cut back to the point of profitability. Profits, after all, have been just fine this quarter… and why should stock prices relate to employment rather than profits?

  4. NoKidding says:

    I can not believe there is short interest in anything right now.
    What are those people thinking.

  5. wow, those Republicans work fast!

    The economy is already turning around!

  6. Kort says:

    Market (DJIA) might be up ~15% since late August but the CRB index is up ~20% —so costs are rising, inputs (commodities) are rising at even faster clip. My 401K is up so much!!! But I can buy even less than before since, every commodity is going through the roof. Hmmm…

    http://www.crbtrader.com/data.asp?page=chart&page=chart&sym=CRY00

    http://finance.yahoo.com/echarts?s=%5EDJI+Interactive#symbol=%5EDJI;range=3m

    Market might have been up a couple hundred points yesterday but, was actually down 1.5% when priced in Gold since gold spiked big time.

    http://www.zerohedge.com/sites/default/files/images/user5/imageroot/gono/Gold%20ES%2011.4.jpg

  7. takloo says:

    wasn’t most of the 600 billion QE priced in… i believe the market expectation was 250-500… lets say, the extra 100billion above the top range of expectation wasn’t priced in and assume all of that liquidity goes in the stock market…

    yesterday’s S&P500 market at close was 11,067 billion (from S&P), 1.93% rise ~ 210 billion… thats right, the market cap went up by that amount yesterday in “anticipation” that QE2 will induce stock buying

  8. call me ahab says:

    BR-

    nothing like leaning on old tired dogma to get the economy turned around (the Democrats would have faired much better if the “mandatory” health insurance bill wasn’t crammed down everyone’s throat)-

    also- I left an insightful comment on your iPad post- but you must have mistakenly deleted it-

    lol

  9. “wow, those Republicans work fast!

    The economy is already turning around!”

    LOL ! That is hillarous.

  10. Cynic_FA says:

    What is the Bernanke Bid?

    We used to talk about the Greenspan Put – don’t worry, if stocks fall we will cushion the decline.

    We have a new strategy: The Bernanke Bid – don’t wory if prices don’t go up fast enough we will push the bid up.

    Bernanke was quoted yesterday that the Federal Reserve did not cause the housing bubble by holding interest rates low for too long. Yeh right you f^&()&ing idiot! I am hoping that Rand Paul will introduce a bill to audit the Fed and then cut their balls off. (or cut their balls off first and then perform the autopsie)

  11. ashpelham2 says:

    It is pretty telling that we can have a stock market booming while the general economy just continues to trudge along. There isn’t a disconnect: it’s a complete “de-coupling”, as the word was bandied about a few years ago. The stock market might even have an inverse relationship to jobs and hiring now. We are our own biggest expense, and we are the only reason that we aren’t profitable, at times.