US payrolls preview | FT Alphaville

US payrolls preview

The consensus is pegging 180,000 as the magic number, with the unemployment rate ticking up slightly to 9.1 per cent. Via Bloomberg:

No fewer than five economic releases this week — ADP employment, the employment components of both the ISM manufacturing and ISM services reports, initial weekly claims, and the Beige Book — all suggested that a good number this morning is in the cards. All of them have flaws as leading employment indicators, but combined with the possibility that we’ll see a big revision to the snowed under report for January, there’s a decent chance the consensus is right to be so optimistic.

On the flip side, it’s not as if the past month has been all peaches and cream, as Catherine Rampbell nicely summarises:

The economy has been hit with some discouraging trends in the last few weeks. Gross domestic product was lower than initially reported last quarter. Home prices are sliding. Middle Eastern turmoil has sent energy prices higher, which can take a bite out of consumer spending. All of these factors could threaten already meager hiring trends.

To these can be added the uptick in the savings rate at a time when the economy is heavily dependent on consumption, plus the Challenger report showing planned layoffs increasing.

We also needn’t remind you how off the mark the consensus has been in the last couple of months, though we just did anyways. (Granted, those reports were confusing to interpret, with different signals being sent by the household and establishment surveys. This one may be no different.)

As for the market’s historical reactions to surprises in the report, here’s an illustrated guide courtesy of ZH:

Related links:
Payrolls snowed under – FT Alphaville
Claims-ian economics – FT Alphaville
Employment situation preview – Calculated Risk