Payroll numbers out Friday, April 2

[swag]

Friday at 8:30 a.m. Eastern Time, the big labor reports:

Nonfarm Payrolls, US Unemployment Rate, Hourly Earnings, Average Workweek.

One consensus estimate I saw had the economy adding 123,000 new jobs in February (vs. 21,000, all government jobs in January). I think 123,000 is extraordinarily optimistic, but even if it is spot on, it is still far short of the number needed to offset growing workforce, layoffs, etc.

To my mind, the payroll number is the most critical politically for the presidential race. If unemployment stays flat and gas prices stay high, we have a double-whammy for the incumbent and for the economy.

Friday is the day.

[whistle]

1. The BushCo numbers on employment have been overstated...

...every month. They end up publishing a high number then going back and revising the numbers back down. So I expect they'll do the same thing this time and then sneak in the actual numbers two to three weeks out when nobody is looking. John Kerry as a matter of campaign promise says he'll create 10,000,000 new jobs over four years. That means he promises 210,000 new jobs every month following his inauguration. Let's see what Bush promises to do, based on his abysmal record so far.:kick:

[rapier]

2. notes

123K isn't such a great number. Not in the big scheme of things. That's about what's needed to keep even, as more enter the work force.

I think your conventional wisdom on Bush's political need for good job numbers might be wrong. He needs good job number in the fall. Not now.

What the markets need, and the markets ARE THE ECONOMY, is job numbers which are not too strong and not too weak. Number which are just right so as not to spook the bond market and stoke latent inflation fears. The stock market of course could care less about jobs as it has done just fine for 18 months and total employment has continued to fall. THE ECONOMY needs stable or falling long term interest rates above all else.

What I am saying is if the employment numbers are manipulated on a really big scale, then the manipulators if they are particularly smart and devious might consider not inflating those number now. They won't help Bush now and low number just might at the margin help keep rates low.

This sort of convoluted thinking is fun but it is total BS. For enterainment purposes only.

[54anickel]

3. There could be an issue due to the returning strikers in CA -

http://story.news.yahoo.com/news?tmpl=story&ncid=1196&e=3&u=/nm/bs_nm/markets_bonds_dc&sid=95609877

One complicating factor in forecasting the jobs number is a return from strikes and lockouts of 72,000 grocery workers. Economists at Bank One estimate the net effect probably will be to boost payrolls by roughly 50,0000.

"If after abstracting from the strike effects the increase in payrolls is 100,000 or fewer, we would remain highly confident that the first Fed tightening will be after the November elections," said Dana Johnson, head of research at Bank One.

[rapier]

4. notes

Don't the replacement workers get laid off so that the whole thing is a wash.

At this point it appears the Fed will never be able to raise rates. Forget about the election. That's secondary.

[54anickel]

5. This was the second or third article I've seen that mentioned the

end of the strike effecting the employment numbers. It could cause 1st time claims to rise, since the strikers that are not called back immediately will be eligible for UE. The why and how on the "job creation" numbers has me a bit baffled. Would the jobs be getting reclassified from temporary to permanent? :shrug: