Quick Take Ahead of the Jobs Report (UPDATE: +111,000; Unemployment Rate 4.6%; UPDATE 2: BIG prior month revisions)
Unlike in prior months, business matters will keep me from looking at the detail any further than what you see here.
Here is the advance info.
First, ADP’s employment report for January: +152,000; after predicting a minus-40,000 last month when the actual was +167,000 (per the Bureau of Labor Statistics Establishment Survey), it’s going to be a while before this report is taken seriously again. However, if ADP’s number is some kind of leading indicator, or if they are detecting trends earlier than Uncle Sam, it may mean a disappointment today.
Next, other predix from Reuters:
According to the latest Reuters poll of economists, the U.S. Labor Department’s closely watched employment report on Friday is expected to show that 149,000 non-farm payroll jobs were created in January, up (they obviously mean “down” — Ed.) from 167,000 in December.
Based on the latest derivatives auction conducted on Wednesday by Goldman Sachs, interdealer broker ICAP and the Chicago Mercantile Exchange, traders’ median expectation for the January payrolls meeting was at 134,700.
Finally, unemployment rate predictions have been hard to find, but the Chicago Trib says:
When the Labor Department’s January jobs report comes out Friday morning, some experts are predicting the unemployment rate will drop to 4.4 percent, from December’s low 4.5 percent reading.
The actual BLS report will be released at 8:30 AM. The link to it will be here.
I get a sense that the markets would prefer that this report NOT be a blockbuster, as beating expectations might open up inflationary fears, but we’ll see.
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UPDATE, 8:31 AM: Well, if I’m right about the markets, I think they’ll like this, though the news is less than outstanding (but see second UPDATE):
Nonfarm payroll employment rose by 111,000 in January, and the unemployment rate was essentially unchanged at 4.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job growth continued in several service-providing industries over the month, and construction employment also rose. The number of manufacturing jobs continued to decline.
The unemployment rate went up because the additional number of people working according to the Household Survey (used primarily to gauge the unemployment rate) barely budged by 31,000, while the number of unemployed went up by 168,000. The Household Survey had shown the economy adding well over a million jobs in the past four months.
I guess it’s time for the press to cue in the “slowing” meme again, though I think it’s too early to buy that until I see ISM’s non-manufacturing report.
UPDATE 2, 8:50 AM: Holy moly, “never mind” on that “less than outstanding” stuff. The January report revised December’s job growth to 206,000 (+39,000 from last month’s 167,000), and November’s to 196,000 (+42,000 from last month’s revised 154,000). So with revisions, there were 192,000 more people working (111+39+42) at the end of January than were thought to be working as of the end of December. That’s pushing “wow” territory.
The markets may actually be MORE relieved about January’s 111,000 number because the previous two months’ revised results are so high — figuring that three months in a row with high levels of job growth might mean an overheating situation that would lead to Fed interest rate hikes sooner rather than later.
UPDATE 3, 8:55 AM: I think this sentence from BLS is a good rendering of 2006: “In 2006, payroll employment rose by an average of 187,000 per month.” That’s pending one final revision to December.
UPDATE 4, 9:20 AM: John Boehner’s e-mail announcement only mentions January’s 111,000-job pickup and misses the big prior-month revisions, making it easier for the press to do the same.
