NFP Day?

I cannot remember the last time a NFP report came out on a day when the Equity Markets were closed (Bond markets are open half a day).

Regardless, let’s have a quick look at some of the factors leading up to the 8:30 am report:

ADP report of Private nonfarm employment grew 106,000 — below the 135k consensus

• Help Wanted Index: The Conference Board Help-Wanted Index was soft at 31, down from 39 a year ago. Dan Gross quotes Conference Board
economist Kenneth Goldstein: "employment growth may continue, but
probably at a more modest pace through spring and early summer."

• Monster Worldwide, the online jobs/classified site, reduced their revenue and profit projections for 2007, based on slowing growth rates in the North America.

Government Hiring: expect to see a big bump up in state and local hiring (primarily teachers). With government coffers flush, this is an area of hiring that will remain strong for a couple more quarters, but is likely to fade in the future.

Full details will be out at 8:30am

On a related note, Bill King had an interesting spin on the ADP Report: for first time, ADP cut the data by size of company – small, medium and large:

"Not surprisingly, there was job growth in small (most of it) and medium, but jobs were lost at large companies.  And the small companies adding jobs are really small  (less than 49 employees)

Small companies, or those employing up to 49 people, added 81,000 jobs. Medium-sized businesses, which employ 50 to 499 workers, created 43,000 jobs.

This probably provides some insight into why CAPEX feels so sluggish and why corporate demand trends  in general do not feel so good (including IT right now where everyone seems to be struggling)…big  companies are where the CAPEX is and probably the better paying jobs as well with more benefits, etc.   This is probably why durable goods number stunk too."  

Interesting stuff . . .

UPDATE: April 6, 2007 8:37 am

180k —

This is not a big number — though data has been soft the past few months, so its a better than consensus number.

The missus has me off to Lowes — I’ll check out the details later . . .

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Discussions found on the web:
  1. Eclectic commented on Apr 6

    I’m having to rush Bondie to the emergency room.

    Please pray for Bondie.

  2. Craig commented on Apr 6

    Uh Oh, poor Bondie, she must have been cruising on the SS Greenspan…..what a rusty punch bowl of a ship. Even Captain Ben is drinking the punch. Hope he doesn’t run his vessel aground. I told you buddy, we’re on our way to 5.25…..Better get your chicken suit, I mean life vest.

  3. Decided Bear commented on Apr 6

    The number is out.
    Bonds tank.
    S&P’s rally on holiday thin volume.
    The final test of the high and your big chance to call the top and proclaim this market a short.

    Will you?
    Somehow i doubt it..

    Well call me crazy but i’m going all in, not covering till we re-trace at least 10%.

  4. Steve commented on Apr 6

    ADP report of Private nonfarm employment grew 106,000 — below the 135k consensus

    Just to clarify here, the 135k consensus referred to ALL employment (private and government). The ADP numbers predict private employment only.

  5. Winston Munn commented on Apr 6

    Fascinating the government can sustain so much job growth when states as I understand it are having trouble with declining tax reciepts.

    Interesting formula being used:
    ISM down + Help Wanted Index Down = Higher job growth.

  6. evden eve nakliyat commented on Apr 6

    very very nice informations…thank you very much blog. mr sumaaa

  7. Doug commented on Apr 6

    The number of Americans in jail or prison, uncounted in the unemployment rate, has increased from 380,000 in 1975 to 2.2 million today. The % of Americans behind bars has increased for 28 consecutive years and is several times higher than Western Europe. This is one reason for the longer term decline in the unemployment rate, even as the % of Americans working stagnates.

  8. stuart commented on Apr 6

    thank god for construction workers, government workers, nurses and teachers.

    approx 120,000 swing in construction jobs from last month (from -60K to +60K). Basically, if construction jobs stayed the same as last month, the jobs number would’ve been 68,000. To summarize, other than this construction job swing, the US created as many jobs as CANADA last month, which has 1/9th the population. There you have it in a sentence.

    The part of this that ties into the other reports pertain to service jobs (non-retail) and manufacturing. Both continued to weaken. Government, Education and Health care were the biggest gainers..a continuing reflection of the government spending money. Too bad the equation doesn’t pick up the other side of the accounting entry…debt.

  9. shawn commented on Apr 6

    March 2007 job report has the Birth/Death of Business contributed a positive number of 128K. So, among 180K jobs, actual increment is only 52K.

    It is absurd that BLS declare themselves that this Birth/Dead adjustment should be a minimal, but if you look into the data, they are much more than the actual job increment/decrement.

    This manipulation starts March 2006, and so far they contributed over 1.07 million jobs in 1 year. Check it out here —

    I would venture to say, that many company created in the recent years are actually LLC (especially real estate llc) used to hide and reduce taxes. Some of my friends are actually doing it, and it’s getting more common now. But, these LLC companies are really for tax purposes, and there is ZERO employment.

  10. fat mary commented on Apr 6

    given that the market indexs were grinding up all week incuding yesterday on little news, do you think someone new the figures a little early this week?

  11. randy commented on Apr 6

    all right, another 180k hamburger flippers,bed pan wipers,government parasites and walmart “associates”.am i pissed? yea, i guess i am.if the markets had been open today the dow would have went up 200+.the reason i’m on the bear/short side is because of solid facts and what i see going on in the real working world. the only argument i can get from the bull side is the cramer “booyah” type b.s. i’ve said before that when the market does correct the trigger won’t be poor domestic issues or events, it’ll be because the rest of the world does’nt need us or our unsustainable economy.not very scientific but thats how it is. jmo cbw hbb.

  12. V L commented on Apr 6


    Read BLS disclaimer (it is self-explanatory):

    “The most significant potential drawback to this or any model-based approach is that time series modeling assumes a predictable continuation of historical patterns and relationships and therefore is likely to have some difficulty producing reliable estimates at economic turning points or during periods when there are sudden changes in trend.”

    In other words: BLS data is garbage during “turning points”. (BLS had also guessed the same garbage unemployment rate in May of 2001 during the previous “turning point”)

  13. phil commented on Apr 6

    Does anyone really think 60k construction jobs were added last month? I laugh hysterially. I live in Las Vegas, one of the hot spots over the last few years, and construction is noticeably down. If it weren’t for a few large projects that started within the last year or two, the construction levels here would be punk.

    Do you think this ridiculous fudging of the numbers will create the need for an inexpensive econo service that provides real data for it’s clients? Maybe there is one but I don’t know about it and it would probably cost too much.

  14. V L commented on Apr 6

    BLS guesstimated that 128K of dead people were working last month.

    Very interesting adjustment-guesstimate.

  15. Michael Schumacher commented on Apr 6

    And nary a mention of the inflation numbers…
    I’ve noticed that over the last two months, possibly more, the timing of the releases are just too perfect. Today may have been a missed opp. for yet another 200pt “rally” since we’re all employed and , on cue, the revision to not only last months #’s but the previous ones gave the unemployment numbers yet another 1/10 of a point tick down to create more warm and fuzzy feelings.

    And I totally agree with Barry….I have never seen the NFP released on a day in which the markets were closed…..I guesss they thought the inflation number would be awful……(of which I cannot find anything on-more cleverness on the govt’s part).

    ANd yet again the bulls will offer up the same excuse of “Booyah”–or some other innane banter to back slap each other into beleiveing that they posses some great skill when they’ve really only been luckier than hell and refuse to put any of it down to that. Hey that’s the game…….but if you beleive that it’s down to great skill that you have….it sure helps that we continue to be lied to and you are simply taking advantage of that.


  16. daisycolorado commented on Apr 6

    As I read through these comments I am reminded of the old adage that da Nile is not just a river that runs through Egypt.

    Maybe, just maybe, the economy is doing a touch better than what all you perma bears think…. could it be that housing at less than 6% of the economy is not enough to tank the rest. That non-residential construction is booming enough to soak up those unemployed construction workers. That the 60K loss in construction jobs might have had something to do with the weather. That there is not a great government conspiracy out there to fudge every bad piece of economic data into a good one.

    Naw, not possible, and besides it would require that you take off your tin foil hats.

    But whatever you do, please don’t become bullish, because that will be a sign that the end of the expansion is at hand.

  17. Craig commented on Apr 6

    Well, if Duke and Duke are going to run this mkt up for one last hurrah, I’m game for a small peice to the previous high.

  18. Craig commented on Apr 6

    No, it’s a perfect economy. Take a look at those stunning financials Daisy! Aren’t they doing great? No worries, *housing* is only 6% of the economy. All those bankrupt financials mean nothing. Pay no attention to the man behind the curtain….

    Looked at any of those CC apps in the mail lately? How about those interest rates for passbook savings accts? Home equity loans?
    Home loans? Business loans? Seen the default rates for first time home buyers, cars and HD motorcycles?

    No, don’t worry, everything is just fine.
    Charge away.

  19. Michael Donnelly commented on Apr 6

    I sliced and diced the report as good, bad, lagging, and meaningless.

    Full story is here:

    “Good” news was +72,000 new jobs, but even here you’ve got 19 in food, 36 in Retail

    “Bad” news -44k, manufacturing, information, finance, and temps

    Essentially you’ve got 28,000 new jobs for this we get all excited?

    The rest.

    “Laggards” +56k in construction. Fact is even with housing down 40%, no jobs have been lost yet. Really it’s no surprise the exact same thing happened in 1974, 1979, 1981 and 1990. It’s only later that construction jobs go in the tank. So ignore the 56, it isn’t telling you anything.

    “meaningless” +77k There will never be a day that tax supported govt, education, and health jobs are telling you a thing about the economy. They are classic lagging indicators. Ignore them.

    1.45% y/y payroll growth yippee, it was 2.14% just a year ago. Direction matters.


  20. Bob A commented on Apr 6

    Any real slowing in the flow of migrant workers could result in increased official employment. After all if you can’t get a Mexican for $10/hour you have to hire a local for $15. Not sayin that’s happened or is even likely to.

  21. David commented on Apr 6

    Well, my brother got a job in all of 2 weeks of looking and sending out 8, count ’em, 8 resumes. Good job, paying 45K base, plus 45K bonus, good benefits, and he’s all of 25 years old. I think there are still jobs out there. I’m not super bullish on the economy (I do have long-dated S&P puts for insurance, as VIX has been so low, it’s super cheap), but I’m not pulling all my long bets either until I get some confirmation of a real slow-down. Yeah, the leaders don’t look good–transport volume, help-wanted, but I wonder how much of that is construction-related, and we need to wait a bit more for the rest of the economy to get hit.

    You have to check your biases a bit. I mean, let’s be honest with ourselves that the job numbers look pretty decent, but it’s a lagging indicator, and let’s see if we can pare out the construction from the rest of the leaders.

    I have a feeling that everybody’s saying the 180K number is fake, but when it drops to 10K, then it’ll be real. Can’t have it both ways.

  22. fat mary commented on Apr 6

    “I am reminded of the old adage that da Nile is not just a river that runs through Egypt.”

    the real question is WHO really is in denial? hmmmmmm, im not so sure…

  23. RMX commented on Apr 6

    Fat Mary,
    I don’t necessarily think anyone even needed to know the data in advance. In fact, yesterday afternoon’s action resembled the few hours before the last Fed meeting; the market inching steadily up in little “baby steps” as some players “jump the gun” to get a little head start ahead of the planned ramp job. In other words, the actual results are meaningless. It is the event itself that is simply the excuse. The only real question is which version of spin needs to be rolled out (bad number = Fed Cuts or good number = resilient economy).

    Note that last Fed rally was taken back in only 6 trading days. Will be interesting to see how long the jobs rally lasts. I’m not one of those brave souls trying to short this market but I’m not buying the hype either. To me, it still feels like a market that’s being artificially propped up until the big boys have repositioned themselves. We’ll see.

  24. daisycolorado commented on Apr 6

    I never said that its a perfect economy. No economy ever is. Every bull market climbs a wall of worry.

    Housing is clearly a drag, taking a full percentage point off GDP in the past year and likely to do the same this year. Again, its less than 6% of GDP.

    Autos are hurting, particularly the domestic name plates, but Toyota, Nissan and Honda are doing just fine thank you, and many of those cars are built in the US.

    Non-res construction and public sector construction are booming, taking up some of the slack from residential. And eventually, businesses will have to fill up those factories, office towers and retail malls they are building.

    Health care, financial services, education are all adding jobs and growing. Even retail put on a few more people after more than a year of merger related retrenchment.

    The economy has slowed, that’s excactly what the Fed has been trying to do for the past two years. Its no different than what happened in the mid-1960s, 1980s and 1990s. The Fed tightened, interest sensitive sectors swooned and the rest of the economy continued to grow for several more years.

    Recessions are much harder to create then they were 20 years ago. In 2001 we had wall steet scams and accounting scandals, dot-com bubble breaking, and a massive terrorist attack and that produced one of the mildest recessions on record. Its going to take a lot more than a retrenchment in housing to bring this economy down.

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