Friday’s unemployment report was as bad as forecast and probably worse. Yes, the unemployment rate was not as high as suspected but once the data was analyzed it appears the actual number was close to 20%. The most problematic data point going forward is the AVERAGE HOURLY EARNINGS (AHE). The jobs report revealed a historic 4.7% monthly increase but this was for the worst reason.
Posts Tagged ‘average hourly earnings’
Notes From Underground: Courting Disaster
May 10, 2020Notes From Underground: Quick Note on Friday’s Jobs Report
April 4, 2019On Friday we have U.S. and Canadian employment. The Canadian report is important because Canada is an important trading partner of the U.S. so any slowing in Canadian employment may reflect of slowing cross-border trade. The consensus is for Canada to have a DECLINE of 10,000 jobs with the unemployment rate holding at 5.8 percent. From a global perspective, Canada is a good look at the continuing narrative about slowing global economy, which is significant as the New Zealand, Australian, European and Japanese central banks have used the slowing global economy as the reason for maintaining their current accommodative monetary policies. The Canadian dollar has been weak versus many of the key currencies so weak jobs should put more pressure on the Canadian dollar.
Notes From Underground: Bye, Bye Pappy Van Winkle
December 6, 2018At the end of 2017, my readers may recall that I did an unusual thing. I made a prognostication as where the 10-year yield will end the year. I said the 10-year would end the year at 3.41 percent, to which a friend offered up a bottle of Pappy Van Winkle bourbon if the rate reached that level. (The yield was 2.60 percent at the time.) Well, I’m throwing in the towel as it looks like 3.26 percent looks to be the top for the year. I guess I will have to enjoy a lesser-quality libation.
Notes From Underground: Weather Disrupts. Will It Disrupt Financial Flows?
October 4, 2018Based on the recent ADP report and other economic data, logic would dictate that Friday’s jobs report OUGHT to be very strong. If the data is weaker than expected, analysts will look to the impact from Hurricane Florence, ” the storm the authorities came to blame.” There are projections that jobs will be diminished by upwards of 50,000 so the initial algo traders will be thwarted. As usual, the critical component of the jobs number will again be the average hourly earnings (AHE), which are expected to rise 0.3% following August’s increase of 0.4%. If this number were to print 0.5% expect bond futures to come under pressure, even on top of violent increase in yields we have experienced this week.
Notes From Underground: Does AnyOne Really Care About Jobs Friday?
April 5, 2018The first Friday in April brings a key data point: the unemployment report. Of course, what most people are concerned about are THE AVERAGE HOURLY EARNINGS. The consensus is for AHE to increase by 0.3%, which is much better than February’s tepid increase of 0.1% rise. The focus on AHE has rendered the NFP growth a distant concern, especially as the participation rate suggests unemployed are returning to the job market. This calls into question how the FED model measures genuine SLACK in the jobs market. For the U.S., the unemployment rate is expected to be 4.0% with a net gain of 190,000 workers in the nonfarm payrolls.
Notes From Underground: The Same Old Song, With a different Beat (Since 2017 Be Gone)
January 4, 2018After a sharp selloff late on December 29 the market has regained its mojo and rallied 2%. While the first two days of trading for the European markets were not confirming the S&P rally, the DAX and Euro Stoxx 50 rallied with the EURO STOXX 50 closing back above its 200-day moving average on Thursday. The consensus from Wall Street analysts is for emerging markets and Europe to be better alternatives to U.S. investment prospects. Many quality strategists believe the U.S. equity markets are stretched in its valuation while Europe’s recovery is gaining momentum and emerging economies should be the major beneficiary of a synchronized global expansion.
Notes From Underground: The Unemployment Data? I Suppose It’s Meaningless
August 31, 2017It’s the first Friday of the month so that means we will have the jobs report at 7:30 CDT and 7:29:59 if you are a high frequency trading operation you do the math. Consensus is for 180,000 non-farm payrolls and the overall rate remaining unchanged at 4.3%. The most important piece is the average hourly earnings (AHE), which is predicted to be 0.2% which is lower than the July data. Regardless, with the economic impact from Hurricane Harvey still an unknown the FED will be kept from raising interest rates at its September meeting. But if the AHE is strong the FED may move to commence shrinking its balance sheet because Lael Brainard has already informed us that the FED analysts theorize that QT has far less economic impact then a RISE in the fed funds rate.
Notes From Underground: Unemployment Data In the Time of Janet’s Fed
March 31, 2016It is the end of the first quarter and it was an amazing time to be a volatility fabricator in the land of algo-driven headline readers. This quarter has seen a great deal of ebbing and flowing for the global equity markets as China, the Fed, the ECB and BOJ have created fear and greed in copious amounts. But as the SPOOS have ended 0.8% higher (after being up 11% in February), the world is well for U.S. domestic investors. The remainder of the developed world equity markets have not fared as well even as its central banks have been very involved in creating new rounds of liquidity and driving their lending rates into negative territory. The DAX and Japanese equity markets seem to be trapped by anemic growth, as well as appreciating currencies. The recent noise from the FED seems to have caused a REVERSAL IN LONG DOLLAR POSITIONS as the short dollar trade was every major investment bank’s favorite trade for 2016. So it goes.
Notes From Underground: Brazil Shaves Their Rates Unexpectedly
September 1, 2011First of all, NOTES will be on HIATUS for a well deserved rest from the turmoil of global events and the chaotic impact they have had on markets.