[channelling Henry V]: Its that time again kiddies, as we look at the monthly payroll data this morning.

From an investing standpoint, any one single monthly NFP is more or less irrelevant. As we are so fond of saying, its the overall trend — are jobs being created at a pace that increases potential revenue or profits? — that is significant, not any one month’s number.

However, this NFP IS much more significant from a political standpoint. Following the trouncing of the President at the debates by Mitt Romney, there could be consequences for an outlier report to each candidate. Note that while the ADP report was an upside surprise, it hardly correlates with the initial BLS Employment Situation report.

Bloomberg’s survey of economists –I know, that is a failing statement right there — expects unemployment to increase to 8.2% (from 8.1%) while Payrolls are estimated to have climbed by 115,000 workers. The average for 2012 has been 139,000 per month, barely keeping up with population growth.

As we have seen, for the better part of 2 years, the fundamentals have not been exactly the primary driver of equities or bonds. The possibility of a recession sometime before 2014 has increased; Europe is slowing; Asia is soft, the US is cruising along just above stall speed. With earnings at a peak (and potentially contracting), every data point seems to have an increased significance. Whether its the Recency Effect or something else, that seems to be the general gestalt surrounding this report.

I am not suggesting that NFP is wholly irrelevant — its just that we place way too much emphasis on each one, rather than the overall trend of employment. At least CNBC’s countdown to NFP is only measured in seconds, and not 100ths of a second.

 

UPDATE: September jobs 114k; August jobs revised higher by 46k jobs to +181k (was +141k); July +142k ( was +96K); Unemployment rate moves from 8.1% to 7.8%.

The impact will be more political than investing — future move up modestly — but watch the “Romney rally” stocks I linked to last night for weakness possible weakness . . .

 

~~~

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.

13 Responses to “*Sigh* Its NonFarm Payrolls Day”

  1. schirimiester says:

    I wonder what the over/under is on Santelli’s head exploding before noon after these numbers??

  2. dead hobo says:

    BR fretted:

    I am not suggesting that NFP is wholly irrelevant — its just that we place way too much emphasis on each one, rather than the overall trend of employment. At least CNBC’s countdown to NFP is only measured in seconds, and not 100ths of a second.

    reply:
    ——–
    It looked pretty damn good to me. But what do I know? I’m not a Wall Street pro.

    This report ties into my belief we are at a world economic bottom and, unless the martians land or a meteor hits, or something similar happens; world markets have nowhere to go but up over time. As I said earlier, this is the beginning of a time when it is safe to buy and hold for an extended period, as opposed to quick trade like a bunny. Yes, there will be dips and drops, but nothing a normal person won’t mind waiting out.

  3. Livermore Shimervore says:

    #1 Obama Gallup approval 54%
    #2 Unemployment below 8%
    #3 Obama ahead in Ohio
    #4 Obama ahead in Florida
    #6 Hispanic support highest of any Dem in decades
    #7 Bush, Reagan lost debates still won election
    #8 Big Bird in peril

  4. Livermore Shimervore says:

    #1 Obama Gallup approval 54%
    #2 Unemployment below 8%
    #3 Obama ahead in Ohio
    #4 Obama ahead in Florida
    #5 Hispanic support highest of any Dem in decades
    #6 Bush, Reagan lost debates still won election
    #7 Big Bird in peril

  5. diogeron says:

    Jack Welch is tweeting “the Chicago guys” cooked the numbers. Too bad he’s turned into such a bitter, knee jerk partisan. One would think if “the Chicago guys” were going to cook the numbers and it was that easy that they would have started doing it a long time ago. As for Rick Santelli, well, if ignorance is bliss, Rick must be in a perpetual state of ecstasy.

  6. econimonium says:

    I’m with Livermore on this one. I think that this is a great time for the media to sell ads and collateral if they spin the story that this election is still in play. By the numbers, it isn’t, and it hasn’t been in a long time. Look at the electoral college map and figure it out. Nothing has changed even after the debate, and the employment numbers are going to make everyone forget what the hell Romney said 2 days after the debate.

    And, let’s just say that Romney nuked Scott Brown’s chances of keeping his seat too. So not only is he going to lose, the Republicans have no chance of taking the Senate either. Conservatives better start getting used to the idea of 4 more years of Obama in the White House.

  7. philipat says:

    NFP Preview: Withholding-Tax Collections Up 5.3% in Q3 on October 3rd.

    “As predicted last month (And critised by Mangement for implying that the participation rate was open to “Massage”) I still project about 100K and an unemployment rate of 7.9%.

    I nreality, this is a volatile series and reading too much into a single data point is ill-advised. That said, the trend remains soft at a level at or below the rate required to basorb the natural expansion of the Labour Force.”

    Dam, missed it by 0.1%. Jack Welch seems to share my cynicism in this regard from his Tweet?

  8. Jim67545 says:

    Listened to Shiller on Bloomberg this morning. He pointed out that the housing boom hit its peak in 2006 but didn’t blow up until 2008. This illustrates the fact that it takes some time for crappy loans to go south and more time still for it to accumulate to the point where it begins to sink the lenders. Then too there is a period of denial and sweeping under rugs.

    I keep hearing that delinquencies are rising in southern European countries and even China. If you have 25% unemployment it is hard to see that delinquencies on loans of all types will not go ballistic. I fear that this is a huge shoe that, because of the delayed nature of the situation, is still to drop on the European (and other) banking sector.

    So, are we at a bottom with an upswing from here (as suggested by other contributors) or are we approaching the second leg down?

  9. theexpertisin says:

    There is nothing more expressed than the power of the Presidency during election season.

    With a compliant media, it is enhanced even more.

  10. gms777 says:

    I can only report on what I see in my town, a small-ish Southern town that’s home to a major university. It may be the most liberal place in the South.

    Four years ago Mr. Obama rented a huge storefront. Huge celebrity rally on campus. College kids were everywhere getting out the vote. So were bumperstickers.

    Last week the campus newspaper ran an article saying that the Dem. party was having a hard time getting students active…and that the GOP was doing fairly well on campus.

    I actually tried to get a job with the Romney campaign, doing voter registration. Didn’t get hired. I think it’s because they knew the state was theirs and decided to spend the big bucks (!) elsewhere. That was a month ago. Our governor, a Democrat, decided not to run again. That was six months ago. Can’t help but wonder if she knew something.

    All my friends are very liberal (everyone here, except me, is very liberal!). They are disheartened. But really angry, perhaps disappointed that the promised hope has not come.

    Finally, I work with a recent college grad. His job is just fairly okay, but he is extremely glad to have it, as many of his friends are jobless after six months.

  11. techy says:

    gms777:
    why do anyone spend any money in southern states…they are always going to vote based on religion and race, which means republican right?? but on the other hand do you know that there are house and senate seats in liberal states up for play all the time. I wonder if that is because of the fact that republicans in liberal states are pro choice and pro gay…which means they are not republicans at all.

  12. summersorama says:

    I think you may have the moths for the revised data flipped. July was revised upwards to 181,000 while August was revised upward to 142,000. I don’t think that should alter the overall trend though…

  13. SivBum says:

    gms777, time for you to move out of the depressed place for greener pastures. Try Silicon Valley, this place is rocking and partying. This weekend, we have the American Cup racing inside the Golden Gate, two division one College ball games, two major league baseball playoffs, 49ers are playing, jazz festival in Golden Gate Park, some Italian parade in North Beach, Street fair in Castro, Madonna and Kevin Beaver (sic) concerts in town …

    Take the future in your own hands and move to opportunities and don’t wait for them to come knocking unless you are a Caltech PhD in Computer Science.