Just in Case–Get That Seatbelt Fastened

Tomorrow we will have the monthly employment report released.

I see that after a bit of a soft report in October with a 128,000 new job numbers the consensus for November is 180,000 new jobs.

ADP released a 67,000 non farm number for November on Wednesday–that is a damned sight lower than 180,000.

So we all know that these numbers are many times in conflict–and in the end, irrespective of what you believe, the marketplace takes the government report as the ‘official’ employment report, typically ignoring ADP.

One thing is almost certain–if ADP is correct we will likely see a sharp move lower in stocks and a 5-10 basis point move lower in the 10 year treasury–recession talk would be back on the table.

Of course my predictions are worth less than a cup of coffee–BUT just in case I am buckling up at 7:25 a.m. tomorrow.

5 thoughts on “Just in Case–Get That Seatbelt Fastened”

  1. U.S. job gains roared back in November as unemployment matched a fresh half-century low and wages topped estimates, giving the Federal Reserve more reason to hold interest rates steady after three straight cuts.
    Payrolls jumped 266,000, the most since January, after an upwardly revised 128,000 advance the prior month, according to a Labor Department report Friday that topped all estimates in a Bloomberg survey calling for 180,000 jobs. It was the first full month that General Motors Co. workers returned to work after a 40-day strike, adding 41,300 to automaker payrolls following a similar drop the prior month.
    The jobless rate dipped to 3.5%, matching the lowest since 1969. Average hourly earnings climbed 3.1% from a year earlier, exceeding projections, and the prior month was revised higher. Private employment jumped by 254,000. (Bloomberg)

  2. With apologies to Sammy Cahn and Julie Styne…

    Checked my cash on hand this morning,
    As the markets gave their warning.
    I’ve got my shopping list ready to go,
    Let it snow, let it snow, let it snow!

  3. Martin, depending on situation they can do anything. Remember last December interest rates on govt yield bonds dropped a lot. But credit spreads blew out the other way and preferreds dropped hard, along with the common market. During Great Recession a decade ago many preferreds in stressed financial sector dropped 75%- 85%. Even utility preferreds which had no problems with access to capital or profit problems had their preferreds tank 30% ish under “par” also.
    So there isnt a total straight answer as it also depends on the worries in the capital market.

  4. My prediction is soft jobs growth but hot wage growth. Bear in mind the 180K consensus forecast is high due to striking GM workers returning. Not sure if ADP treats strikers differently.

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