Preliminary Thoughts on July Nonfarm Payrolls
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July nonfarm jobs data is out Friday August 5th.
Actual Briefing Market
Date Time(ET)Statistic For Result Forecast Expects Prior
Aug 5 8:30 AM Average Workweek Jul - 33.7 33.7 33.7
Aug 5 8:30 AM Hourly Earnings Jul - 0.3% 0.2% 0.2%
Aug 5 8:30 AM Nonfarm Payrolls Jul - 175K 180K 146K
Aug 5 8:30 AM Unemployment Rate Jul - 5.0% 5.0% 5.0%
175K-180K looks like rather strong expectations in light of all the mass layoffs we have seen lately. Sentiment is still strong that this economy is growing nicely in spite of a huge job miss last month and wildly unexpected mass layoff announcements. If the numbers comes in weaker (which is my expectation), I would expect to see a rally in treasuries and interest rates products in general. If there is a huge downside miss (not unlikely) there will likely be a huge treasury rally. Are treasury bears feeling lucky? Unless the numbers come in really hot, I would not expect much of a treasury selloff (as strong numbers should already priced in).
As for the market, which seems to rally on every bit of bad news lately, I am not sure what to expect. Eventually the cheerleaders are going to figure out that all these mass layoffs and job cuts are not really a good thing, regardless of how many jobs are created at Walmart to replace them. BTW, eventually means the middle of the next recession when they will all be chanting "no one could possibly have seen it coming".
Thus, no matter what the numbers are, expect for a bullish spin to be put on it. On a downside miss they will be talking about the FED pausing, on an "in the ballpark" play we will hear about the "Goldilocks Economy" and if the numbers are hot, they will say that higher interest rates will "not matter".
Those with idle time on their hands might wish to turn on CNBC and count how many times they say "Goldilocks Economy". The closer we are to a range of 150K to 190K the higher will be the Goldilocks count.
Mike Shedlock / Mish
http://globaleconomicanalysis.blogspot.com/
