NFP Day — Abandoning the Over?

In April, I deviated from the longstanding "Under" gamble and took the "Over." It was a winning bet.

Last month revealed that April’s release (for March jobs  data) was a mere exception to the rule. All the Katrina relocatees were finally caught up with by BLS. Like GDP, they reflected a surge which was really a push forward from Q4 2005. 

The overall trend remains soft. While I have no particular feel for this month, the Bloomberg consensus for 170,000 (Reuters survey is for 175,000) shows that perhaps the Dismal Scientists have finally figured out that job creation is not what it is typically at this phase of a recovery. (Look for a big NYT story on this subject Sunday).

I’m tempted to take neither the Over or the Under — perhaps they (collectively) got it right this month. (And by right, I mean plus or minus 10k).   

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Update June 2, 2006 7:41am

WSJ’s Justin Lahart suggests we "Worry less about the total number than the wage component:"

"But with the Federal Reserve on inflation watch, the number that matters most could be elsewhere in the report.

The government’s measure of average hourly earnings — a proxy for wages — has been marching higher. If the march continues, market players will worry the Fed has more wood to chop…

Wages might have accelerated more than economists estimate. Private staffing firms surveyed by Bear Stearns analyst Andrew Steinerman said a tight labor market is allowing them to raise fees. If these businesses are able to charge higher prices for their services, maybe workers were able to charge more for theirs."

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