We get the February payrolls data in about an hour — the consensus estimates of 210,000 net new jobs follows last January’s 243,000. The range is of 125,000 to 275,000.

Bloomberg notes that another 200k+ job number would “cap the strongest six-month hiring stretch since 2006.”

If we get a consensus number (190k-230k), the factors to watch for are 1) revisions; 2) temporary hires; 3) hours worked;  and given the Fed concerns about inflation, 4) wages paid.

The more interesting variant is what happens if we get either a big upside or downside surprise.

A big miss means the recession camp gets new life breathed into it. After last month’s data, I downgraded my recession probability over the next 12 months from 50-60% to 40-50%. That is still higher than the street, but there is compelling data-based reasons to be concerned about another slow down. The NFP trend over the past year certainly has not been one of them.

An upside surprise is also a fascinating wrinkle, with three significant responses:

1) The usual conspiracy doofuses will don their dunce caps and scream “fix.” Follwo Caroline Baum’s advice and ignore their money losing silliness.

2) Politically, every strong NFP makes the incumbent that much harder to beat. If we get another very strong number (+225k), expect to see one or two GOP challengers drop out of the race.

3) Monetary policy is primarily concerned with Employment and Inflation. A big upside means the former is improving and the latter is becoming a greater concern.

Ignoring the Dumb and Dumber of 1 & 2, what we really need to watch is 3 — the only one that matters to investors.

The Fed could take a strong number as an excuse to begin removing the extraordinary accommodations they have in place. At the very least, the jawboning would get ratcheted up quite a bit.And the inflationistas would similarly pound their war drums even louder.


Employment situation report released at 8:30am

Category: Data Analysis, 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.

14 Responses to “NFP Day: Consensus 210,000 (watch for Outliers)”

  1. Doofus says:

    227K plus revisions of 61K.

    Not too shabby.

  2. VennData says:

    Today’s number, bad for gold.

    Fed will raise rates a few months after they talk about raising rates.

    Due to the innumerate Fed bashing the GOP engaged in prior to the primaries, and tin-foiler Ron Paul continues, the Fed will not talk about raising rates under normal circumstances before the election.

    The conspiracy theorists have got to try to talk down the markets so they can buy back in at lower prices, since they missed the three year rally. Their Santellisms will keep them out of stocks, and in the emotional straightjacket. Any of them that throw in their straight jackets…er…a… towels before the election will be rewarded. But alas… they won’t.

  3. rsinnott says:

    Not only that, civilian labor force participation climbed +.2% which is the first time in quite a while we have seen a positive move in this particular statistic.

  4. rktbrkr says:

    birth/death added 90K, thank you god

  5. rktbrkr says:

    deus ex machina ( /ˈdeɪ.əs ɛks ˈmɑːkiːnə/ or /ˈdiːəs ɛks ˈmækɨnə/ day-əs eks mah-kee-nə;[1] Latin: “god out of the machine”; plural: dei ex machina) is a plot device whereby a seemingly unsolvable problem is suddenly and abruptly solved with the contrived and unexpected intervention of some new event, character, ability, or object.

  6. Doofus says:

    3) Monetary policy is primarily concerned with Employment and Inflation. A big upside means the former is improving and the latter is becoming a greater concern.

    Not sure we have a tight enough labor market overall to be concerned about wage-driven inflation. Surely, there are some regions and some professions in which wages are rising more rapidly than others. But overall, it seems to me that there are still too many people un- or under-employed for wages to be a substantial driver of across-the-board inflation.

  7. willid3 says:

    doofus, you are right it wont be.
    but it wont matter as we will be sold that we need to cut wage inflation to create jobs of course.

  8. rootless says:

    “… , since they missed the three year rally.”

    After reading several articles on Bloomberg and Yahoo in recent months (particularly note some journalist whose name is Whitney Kiesling, but also others) I know it’s a good thing to have missed the three-year rally. Most recent stock valuations have been the best ones for decades. Now, stocks are even cheaper than in March 2009.

    The right time to buy in the stock market is now!

  9. rootless says:

    rktbrkr, wrote:

    birth/death added 90K, thank you god

    Birth/death added 90 K to what number?

  10. Concerned Neighbour says:

    VennData, there is no conspiracy. It’s all right out in the open. The markets are simply not allowed to go down. The central banks have seen to it, and regularly boast about their market manipulation success. There is no market anymore, and anyone who thinks otherwise has their head in the sand. The evidence is incontrovertible.

    The above comment brought to you by a politically moderate, gold-eschewing, Ron Paul mocking, happy about the positive jobs data guy.

  11. ami_in_deutschland says:

    @Mark E Hoffer: You can shorten your links with a URL-shortening service like TinyURL, or if you want to make it fancy, you can use HTML markup like this:

    <a href="http://www.thefreedictionary.com/fool%27s+errand&quot;
    target="_blank">Fool’s Errand</a>

    To do this: Fool’s Errand

    (The target="_blank" in the code is an optional command which opens the link in a new browser or tab.)

    To make all this quite a bit easier, there are a few browser addons out there (BBCode is one) which will automatically insert the needed markup tag around any link you want to insert.

  12. ami_in_deutschland says:

    Oddly enough, target=”_blank” didn’t achieve the desired effect. Either I forgot it (which I doubt), or the function is suppressed on this page.

    Oh well…

  13. Mark Down says:

    ” 1 or 2 GOP Challangers to drop out of race” These 4 clowns are racing to Tampa with a detour at Mons Venus to see who’s the first in the door !