Tomorrow’s Jobs Report Might Come As A Surprise To Economist…

January 8, 2015 0 Comments

That is, if you having been following the Employment Situation trends for the better part of the last decade. On average, the street tends to be very bullish overall, but looking at technical indicators (like historical employment gains, for one) could show that maybe this optimistic should be curbed slightly.

Historically, we’ve seen net payroll prints experience a month of low growth after experiencing a month of relatively high growth. Whether or not this trend will be broken, I won’t know until tomorrow. We can review some recent trends within the last 5 years. Consider the surge in 2010, in May 2010 there was an uptick of 516,000 net employment gains. Most of this was the result of the Census overall, which takes place every decade, as 422,000 of those employment gains were government employees.

Then you have November 2013, where the economy created 274,000 that month, the largest gain since February 2013. This was immediately followed by a drop in net employment gains of about 85,000, while most market analyst expected anywhere from 165,000 – 250,000 jobs. This significantly low number was blamed on the severe weather conditions at the time, for those of you who remember, and it was assumed that these numbers would be revised upward for accuracy. Unfortunately, this optimism was misplaced, as those numbers were actually revised downward to 84,000 the following month.

The same trend seems to be occurring this time around. Last month the economy experienced a 321,000 net gain in payroll prints, which surpassed market estimates of at least 240,000 job. Tomorrow, the market is estimating 230,000 payroll prints, which is lower than their initial estimates last week. I have a feeling that tomorrow’s employment numbers, like others in the past, may come to a surprise to market analyst and economist.

These days, employment numbers are highly anticipated, given the economic climate of today. But it will probably be more fun looking at the numbers behind the numbers. After all, the devil is in the details. 

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