NonFarm Payroll Day: Not-So-Great Expectations

We’ve been looking at various unemployment rates lately, heading into today’s NFP report at 8:30 am.

A few things worth mulling over while we await that data point:

Trend: The overall trend for the past 3 years has been decellerating job creation, and increasing unemployment. Of the two, job creation is the data series that has gotten appreciable worse the fastest;

• Birth/Death adjustment typically swings from a big negative in January to a big positive in February. This may skew today’s results upwards.

ADP data was a big downside surprise;

• Unemployment rates have only begun to move up, 0.50% off of the lows
to ~4.9%. Initial and continuing claims for jobless benefits have been rising steadily. The risk is if and when this series begins to accelerate upwards.

• Today’s consensus number is for 25,000 new jobs, from a range of  -50,000 to +50,000; 

• For unemployment, the consensus is a 5.0%, with a range from 4.9% to 5.1%. No one thing UR is getting any better, but few think its is getting much worse too quickly.

Rex Nutting points out two additional factoids:  1) The number of consumers who say jobs are hard to get increased sharply in the Conference Board survey in February; and, 2) Employment subindexes have fallen in the Institute for Supply Management and other similar business surveys. Neither of these are positives leading into today’s NFP.

Remember, any single data point in a volatile series is relatively meaningless; Its the overall trend that matters.

Note: I am out of pocket for the next few hours, ending up at Bloomberg TV, and won’t be able to follow up for some time . . .


Job growth has slowed to a crawl, economists say
Rex Nutting
MarketWatch,  7:39 p.m. EST March 6, 2008

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What's been said:

Discussions found on the web:
  1. Dee Leverage commented on Mar 7

    I just learned on CNBC that

    1) This is the most important jobs number ever

    2) If it is bad, Fed mught do an emergency cut.

    If the latter happens, I, the Prophet of Margin Calls, will send gold over 1000. I ahve just bboked my trip to China for the Olympics.

  2. American ZIRP commented on Mar 7

    Callen you pompous windbag!!!

    You and your ill-fitting suit should be in the cell right next to Bernie Ebbers! You are a deceitful con.

  3. Dee Leverage commented on Mar 7

    I already called on Mr. Callen…he is now a zombie. Nice guy though…we are going to play a round of golf after this credit crunch is over.

  4. VennData commented on Mar 7

    What I’d like to see released, with as much fanfare, is something similar for capital.

    So say a hedge fund – incorporated in Guernsey, the beneficial owners having been the likes of G. H. W. Bush, Reagan’s defense chief Frank Carlucci, Carter White House aide David Rubenstein… yadda yadda – how much in taxes (a simple rate would do) these patriots are paying to fund our protection from terror, occupation(s) etc.

    So once a month at 8:30 EST sharp we see the tax rate of every pool of capital. We can ooo and ahh at what patriots they are, even if they can’t hear us over in Grand Cayman, Channel Islands, Liechtenstein, Switzerland etc.

    CNBC might also throw in a recap of how the Bush administration listened to lobbyists at ‘The Center for Freedom and Prosperity’ (more patriots, I’m sure) and undercut OECD attempts to stop these off-shore tax havens in 2000…

    …so you and I are the ones who pick up the tab ’round these parts.

    So let’s hear about labor AND capital.

  5. JustinTheSkeptic commented on Mar 7

    They are at it again on CNBC, talking Bernanke put, ahead of everything else…who the fuck are these ass-holes anyhow! Cut! cut! cut!

  6. JustinTheSkeptic commented on Mar 7

    Did I mention: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as a result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved.”

    Ludwig von Mises

  7. Neal commented on Mar 7

    Hey, what’s the problem–the unemployment rate is at record lows!

  8. Stuart commented on Mar 7

    The unemployment rate calculations are an absolute joke. The BLS equivalent of the rating agencies “AAA” determination. Yes, a separate survey, but to purport that there are more employed this month as implied by a drop in the unemployment rate (1-.048) compared to two months ago (1-.05) is ludicrous and one very quickly risks losing all credibility amongst their peers in attempting to do so. We lost 63,000 jobs and that is including the Govt adding nearly 40,000 jobs and I already see headlines showing unemployment rate improved last month. Perhaps we can discourage every person looking for a job and drive them out of the market in order to get the rate down to 0%. If anything the past year or two has illustrated its that our economic statistics need a complete and utter overhaul….AND we need more critically thinking market commentators and analysts. I would suggest BR, you be the 1st one to apply for a new economic reporting czar.

  9. Dee Leverage commented on Mar 7

    Dow will open below 12000 and close around 11,600…that’s a 400 point drop. 10,000 coming soon after.

  10. jake commented on Mar 7

    WOW even bagdad bob(jack boroudjian)couldnt spin this he could do was “it’s only one number”…he looked worried..were in big trouble

  11. Winston Munn commented on Mar 7

    To put things in perspective, the 40K in government jobs were new graduates of Sven’s School of Swedish Relaxation Techniques who were hired by the Commerce Department to massage the numbers.

  12. E commented on Mar 7

    Watch out for the Fed backstop via rate-cut. When it’s obvious that the market’s going to have a brutal day, it’s a good time to ride the Fed’s coattails.

  13. bluestatedon commented on Mar 7

    Dee Leverage, three months ago I would have agreed with your prediction. However, the behavior of the market over that time has been so consistently ridiculously counter-intuitive (or fraudulent if you prefer) that I think the opposite will happen. The market will more or less disregard the unemployment numbers and instead focus on AMBAC’s raising of $1.5 billion as a sign that all is well. After some initial losses, the Dow ends up higher today.

  14. vhehn commented on Mar 7

    our test for today:
    “Bull Markets are Born on Pessimism,
    Grow on Skepticism,
    Mature on Optimism,
    And Die on Euphoria.”
    -Sir John Templeton

  15. Dee Leverage commented on Mar 7


    You are getting too cute by half. The head and shoulder neckline, a tremendous support level for the Dow is 12000. We will gap down below that support. This breakaway gap does not have to be filled soon…but they may try. That said, 12,000 is now massive resistance. 10,000 is the next stop. Google to 215, BTW.

  16. bluestatedon commented on Mar 7

    Blowing past 12,000 on the way down is what makes sense to me too, but I’ve been wrong so many times over the last several weeks that it’s clear I haven’t a clue about any of this (which is why I get my daily education here). Of course I could say the same thing about the folks at the NAR.

  17. DonKei commented on Mar 7


    Do your additional 40,000 government jobs include all those at FNMA, Freddie Mac, FHLB, etc., that are now de facto employees of the almost completely nationaized mortgage funding industry?

    Just wondering.

  18. michael schumacher commented on Mar 7

    watch the SPY…….the “mystery buyer” will appear….afterall it IS a friday with the rest of the world markets closed until Sunday afternoon…..

    friday’s suck (from an anticipation standpoint) for long term shorts……


  19. michael schumacher commented on Mar 7

    wait until Bushco starts adding in the soldiers ala Reagan in the 80’s to the NFP.

    “don’t like what you see?….don’t look”

    was a quote I recall from the late 80’s that passed as “analysis” of this very same issue.


  20. SPECTRE of Deflation commented on Mar 7

    MS, nonsense as usual. Blah…blah…blah. The same crap over and over again. Still living in Reagan’s time I see. Which group is being responsible exactly? 60 Trillion Dollars, and you are still talking Reagan. LOL! Unfrigging real!

  21. SPECTRE of Deflation commented on Mar 7

    They ALL suck folks. There is no way in Hell we got to this place because of one group or another. They were both up to their eyeballs in sending America down the rabbit hole.They can give a rat’s ass about J6P.

Read this next.

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