While we await a better understanding if exactly what happened yesterday, let’s remember that today is a NFP day.
March 2010’s +162k was likely the first of many six figure gainers in Non Farm Payroll. The Bloomberg consensus for April is +190k, with forecasts ranging from gains of 75,000 to 300,000. Estimates for the unemployment rate were 9.5% to 9.8%.
Upside risks are the census workers. We could see an additional 100k new jobs built into the monthly data. Any downside surprise raises the possibility that the recovery is weaker and perhaps non self-sustaining. We would need to see more than a single data point to adopt this position.
One other thing: Each month, some parrot will describe NFP as as lagging indicator. As applied to the headline number, that statement is generally correct.
It is, however, useless and misleading. We are not limited to only reviewing headline data — we can take apart the underlying components that are NOT laggards. As we have beaten to death over the entire course of the recession, various aspects of NFP are leading, not lagging factors:
• Temporary Worker Hiring — Temp Help is now up for 7 consecutive months; It imp-roved long before the monthly data series turned positive.
• Hours worked — off of the records lows, but not by much. We interpret this to mean that the jobs recovery will be a long slow affair.
• Wages: Flat as Kansas — with big implications for the savings rate and consumer spending
By now, you should know the drill: BLS report will be released at 8:30am, comments to follow.
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