How the mar­kets are brac­ing for U.S. un­em­ploy­ment and pay­rolls

Financial Mirror (Cyprus) - - FRONT PAGE -

The fi­nan­cial mar­kets will get to see the re­port on pay­rolls and the em­ploy­ment sit­u­a­tion from the U.S. De­part­ment of La­bor this Fri­day.

This is one of the most closely watched eco­nomic re­ports of them all. We will also get sev­eral pre­view re­ports ahead of the for­mal La­bor De­part­ment re­port.

Note that there is vari­a­tion in con­sen­sus es­ti­mates from news agency to news agency. In­vestors and economists also should un­der­stand that these num­bers are sub­ject to re­vi­sion, and the pre-read­ings might cre­ate a di­rec­tional bias change.

Bloomberg has es­ti­mates for non-farm pay­rolls (NFPs) and 170,000 for pri­vate sec­tor pay­rolls in Septem­ber. The prior first-look re­ports from Au­gust, which are likely to be re­vised, were 151,000 on non-farm pay­rolls and 126,000 on pri­vate sec­tor pay­rolls. Dow Jones is call­ing for NFPs to be 165,000.

The of­fi­cial un­em­ploy­ment rate is pro­jected to be 4.8%, com­pared with last month’s 4.9% read­ing, ac­cord­ing to Bloomberg, but Dow Jones cur­rently has the es­ti­mate pegged to be flat at 4.9%. This for­mal num­ber sounds as though it would be the most im­por­tant read­ing of all, but the num­ber’s vari­a­tions can be mis­lead­ing, depend­ing on the labour force par­tic­i­pa­tion rate.

Av­er­age hourly earn­ings were ini­tially re­ported as up 0.1% in Au­gust, and the Bloomberg con­sen­sus for that read­ing is a gain of 0.3% in Septem­ber. Dow Jones is call­ing for hourly earn­ings to have risen 0.2% in Septem­ber.

The av­er­age work­week was 34.3 hours in Au­gust and is pro­jected by Bloomberg to have ticked up to 34.4 hours.

Wed­nes­day, Oc­to­ber 5 will bring the ADP pay­rolls re­port. This aims to pre­empt the La­bor De­part­ment re­port. While the num­bers are not al­ways in­dica­tive, what they have been good at do­ing is set­ting the di­rec­tional tone for re­vi­sions and unof­fi­cial es­ti­mates. The Au­gust ADP Pay­rolls re­port was 177,000, and those es­ti­mates are 170,000 from both Bloomberg and Dow Jones alike.

Thurs­day’s last-look re­ports will in­clude the Challenger Job Cuts Re­port (32,188 for Au­gust) and weekly job­less claims (254,000 the prior week). Job­less claims are at their long­est sub-300,000 read­ing since 1970 or so.

Be­tween now and then, we also have sub-in­dex read­ings that will show em­ploy­ment mea­sure­ment as well. These in­clude the PMI Man­u­fac­tur­ing In­dex and the ISM Man­u­fac­tur­ing In­dex, fol­lowed by Wed­nes­day’s two re­ports from the PMI Ser­vices In­dex and then the ISM NonMan­u­fac­tur­ing In­dex.

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