wallstreet1928
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Change in Non-Farm Payrolls: -175K (-263K Previous)
Unemployment Rate: 9.9% (9.8% Previous)
Change in Manufacturing Payrolls: -45K (-51K Previous)
Average Hourly Earnings (MoM): 2.2% (2.5% Previous)
Average Weekly Hours: 33.1 (33.0 Previous)
Today’s NFP report due at 13:30 GMT is the marquee event risk of the week in the currency market as traders try to assess the sustainability of the global recovery trade going forward. The US economy remains a laggard amongst the G-3 as job losses have continued to mount. In Eurozone for example German unemployment declined for the fourth consecutive month indicating a marked improvement in labor demand. Even in export driven Japan which has been particularly hard hit by the global recession the unemployment rate improved dramatically in October to 5.3% from a record high of 5.7% set two months prior.
As we’ve noted frequently over the past week, US economy cannot generate organic demand going forward until labor conditions stabilize and ultimately improve providing fresh disposable income for consumers. To that end despite a slight tilt to the positive, this month’s pre-NFP labor reports offer a decidedly mixed picture. Here is how the data stacks up.
Arguments for Stronger Payrolls Report
1. Average Jobless Claims Dip to 512k Compared to 552k a Month Prior
2. Challenger Reports Drops to a Lowest Pace of Layoffs Since March 2008
3. Continuing Claims at 5.79M Compared to 6.09M from a Month Before
4. ADP Reports Private Sector Job Losses at -254K, Lowest Since July 2008
5. Employment Component of Manufacturing ISM Rose to 53.1 Compared to 46.2 Last Month
6. Monster.com Employment Index edges up to 120 from 119
Arguments for Weaker Payrolls Report
1. Employment Component of Non-Manufacturing ISM dropped to 41.1 from 44.3
2. Conference Board Consumer Confidence Unexpectedly Dips to 47.7 from 53.4
3. Strike Activity slightly rises
4. University of Michigan Confidence decreased to 70.6 from 73.5
Perhaps the strongest argument for a better NFP print is the sharp decline in the weekly jobless claims which is always the first step towards and improvement in labor markets. That data point however is offset by the disappointing reading in the employment subcomponent of the ISM Non Manufacturing report which has an 85% correlation with the NFP number.
Unemployment Rate: 9.9% (9.8% Previous)
Change in Manufacturing Payrolls: -45K (-51K Previous)
Average Hourly Earnings (MoM): 2.2% (2.5% Previous)
Average Weekly Hours: 33.1 (33.0 Previous)
Today’s NFP report due at 13:30 GMT is the marquee event risk of the week in the currency market as traders try to assess the sustainability of the global recovery trade going forward. The US economy remains a laggard amongst the G-3 as job losses have continued to mount. In Eurozone for example German unemployment declined for the fourth consecutive month indicating a marked improvement in labor demand. Even in export driven Japan which has been particularly hard hit by the global recession the unemployment rate improved dramatically in October to 5.3% from a record high of 5.7% set two months prior.
As we’ve noted frequently over the past week, US economy cannot generate organic demand going forward until labor conditions stabilize and ultimately improve providing fresh disposable income for consumers. To that end despite a slight tilt to the positive, this month’s pre-NFP labor reports offer a decidedly mixed picture. Here is how the data stacks up.
Arguments for Stronger Payrolls Report
1. Average Jobless Claims Dip to 512k Compared to 552k a Month Prior
2. Challenger Reports Drops to a Lowest Pace of Layoffs Since March 2008
3. Continuing Claims at 5.79M Compared to 6.09M from a Month Before
4. ADP Reports Private Sector Job Losses at -254K, Lowest Since July 2008
5. Employment Component of Manufacturing ISM Rose to 53.1 Compared to 46.2 Last Month
6. Monster.com Employment Index edges up to 120 from 119
Arguments for Weaker Payrolls Report
1. Employment Component of Non-Manufacturing ISM dropped to 41.1 from 44.3
2. Conference Board Consumer Confidence Unexpectedly Dips to 47.7 from 53.4
3. Strike Activity slightly rises
4. University of Michigan Confidence decreased to 70.6 from 73.5
Perhaps the strongest argument for a better NFP print is the sharp decline in the weekly jobless claims which is always the first step towards and improvement in labor markets. That data point however is offset by the disappointing reading in the employment subcomponent of the ISM Non Manufacturing report which has an 85% correlation with the NFP number.
