# US Payroll Data to disappoint?



## Bush Trader (9 March 2007)

Is this the next cataylist for the "Sell-off"?


*US Non-farm Payroll Data Poised To Disappoint?

Source: FN Arena News - March 09 2007 * 
By Rudi Filapek-Vandyck

It is FNArena's impression that expert views have shifted towards a likely disappointing job creation figure later today in the US. Market consensus is that today's release of February non-farm payroll data in the US will deliver a net figure of 100,000 new jobs created outside the agricultural sector last month.

However, a number of market experts have been pointing out this week the consensus figure was trending downwards and likely to continue doing so. As we reported on Wednesday already (see Rudi on Thursday this week) economists at Goldman Sachs believed the number was likely to come out in the vicinity of 50,000 instead and therefore likely to disappoint heavily.
If Goldman Sachs' forecast proves correct, this may have ramifications for the direction of US equities, the greenback and Treasuries not only today but potentially for the near term.

US based trading guru Dennis Gartman weighed in on the argument yesterday with a "guesstimate" of 80,000 new jobs, which would likely be regarded as a disappointment by investors as well.
It would seem that the number of expert views in favour of a likely disappointing employment data release later today is still growing. In particular yesterday's release of a weaker than expected forecast for private employment payrolls in the US, the so-called ADP report, is seen as supporting the shift.

Yesterday's ADP report showed the net creation of 57,000 jobs in February, well below the average of 166,000 for the three previous months. As pointed out by experts, the ADP report has been generally effective in predicting whether non-farm payrolls would come in above or below consensus forecasts, rather than predicting the actual figure.
But there is no certainty about this as the ADP's January report was well out of line with the January non-farm payrolls, when the ADP came in at 152,000 from December's 118,000, while the January payrolls fell to 111,000 from 206,000.

A dismal non-farm payrolls figure is bound to put the US dollar, and likely the USD/JPY under renewed pressure. Experts are predicting the USD/YEN would target the 115 figure.

A major disappointment would also be regarded as an increased chance of a May Fed rate cut. As well, it would resurrect concerns of an emerging economic slowdown in the US, and thus likely provoke renewed sell-offs in global equities, according to experts.


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## money tree (9 March 2007)

The "R" word been making an appearance lately. The slightest hint of it actually happening and the fit will hit the shan.

Im short USD


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## BSD (9 March 2007)

A stunning example of the NOISE that people focus on in the short term

Consensus of 100,000, some analysts at 50,000, last month at 110,000 - what % does this sort of divergence represent in comparison to the workforce of a country with 300m people and a labour force of 151 million?

Missing by 100,000 is the equivalent of 0.066% of the workforce and about 1.5% of the unemployed 

Who cares ?


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## constable (9 March 2007)

BSD said:
			
		

> A stunning example of the NOISE that people focus on in the short term
> 
> Consensus of 100,000, some analysts at 50,000, last month at 110,000 - what % does this sort of divergence represent in comparison to the workforce of a country with 300m people and a labour force of 151 million?
> 
> ...



None the less they are emotional triggers for the panic merchants.


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## money tree (9 March 2007)

lol, hic.

its the most volatile day of the month for FX traders. 

embrace the opportunity!


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## Kimosabi (9 March 2007)

BSD said:
			
		

> A stunning example of the NOISE that people focus on in the short term
> 
> Consensus of 100,000, some analysts at 50,000, last month at 110,000 - what % does this sort of divergence represent in comparison to the workforce of a country with 300m people and a labour force of 151 million?
> 
> ...




How's this for a funky bit of NOISE...

*New Century Financial to halt loan applications*
Subprime lender struggles to obtain financing amid bankruptcy speculation

IRVINE, Calif. - Subprime lender New Century Financial Corp. on Thursday halted all new loan applications as it struggled to obtain financing amid market speculation that a bankruptcy filing was possible.

In a Securities and Exchange Commission filing, New Century said it was only able to fund some of its loans this week, and its capacity to fund new loans has been “substantially limited” due to problems obtaining financing from lenders.

Aside from deteriorating credit quality, the nation’s *second largest subprime lender* faces investor lawsuits and an investigation by federal prosecutors.

New Century said Thursday it is in “discussions with lenders and other third parties regarding a refinancing and other alternatives to obtain additional liquidity,” adding that “no assurance can be given that any of these discussions will be successful.”

A New Century director, David Einhorn, resigned from the company’s board Wednesday night. Einhorn is a principal at hedge fund Greenlight Capital LLC, which owns more than 6 percent of New Century’s stock.

The Irvine, Calif.-based company has become the poster child for the problems of the subprime mortgage industry, which lends money to people with bad credit. Amid a slowdown in housing markets nationwide, the subprime industry has come under the microscope in the past month.

Shares of New Century plummeted $1.29, or 25 percent, to close at a 52-week low of $3.87 in Thursday’s trading on the New York Stock Exchange.

http://www.msnbc.msn.com/id/17524125/

New Century 10 Year Share price(I feel sorry for anyone who bought them at $60.00)

They only Employed Approx 7,200 (http://www.ncen.com/about_new_century/fast_facts.html)


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## alankew (9 March 2007)

what time are these figures expected


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## coyotte (9 March 2007)

Don't know what time they are released, but things do not look too brilliant for the Bulls on the Bloomberg Site atm.  (22.00 hrs Sydney Time)


Cheers


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## coyotte (9 March 2007)

alankew said:
			
		

> what time are these figures expected



1 hour before the open.


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## bean (9 March 2007)

Expect the unexpected, rally to begin?


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## nizar (10 March 2007)

bean said:
			
		

> Expect the unexpected, rally to begin?




5mins to go.............


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## nizar (10 March 2007)

bulletin NONFARM PAYROLLS GROWTH IN LINE, UP 97,000; SMALLEST GAIN SINCE JANUARY 2005


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## eMark (10 March 2007)

It will be very interesting to see how the DOW reacts to the recently released Payroll figures.

excerpt from

http://money.cnn.com/2007/03/09/markets/stockswatch/index.htm

_"I think markets are not in the mood to see severe deterioration on the employment side," said Wieting. "But a weak report has to clarify the interest rate outlook. It's a tough one."_


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## nizar (10 March 2007)

eMark said:
			
		

> It will be very interesting to see how the DOW reacts to the recently released Payroll figures.
> 
> excerpt from
> 
> ...




DOW futures up 50pts.
Before the data they were down by 6pts.

According to http://www.marketwatch.com/


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## eMark (10 March 2007)

nizar said:
			
		

> DOW futures up 50pts.
> Before the data they were down by 6pts.
> 
> According to http://www.marketwatch.com/




Thanks Nizar. 

At this point the Payroll data & employment figures appear to be having minimal impact on metal prices one way or the other.


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## Dr Doom (10 March 2007)

BSD said:
			
		

> A stunning example of the NOISE that people focus on in the short term
> 
> Consensus of 100,000, some analysts at 50,000, last month at 110,000 - what % does this sort of divergence represent in comparison to the workforce of a country with 300m people and a labour force of 151 million?
> 
> ...




BSD, true they are minute values in the scheme of things but the markets have to take their cue from this sort of data for day to day trading, & longer term it tells a lot about trends developing. So whether you are a trader or investor, long or short term, employment data supposedly gives an advanced indication of the health of the economy. It just so happens in this climate of sensitivity to any bad news & talk of reccession by the likes of Greenspan etc every bit of data has the potential to correct the market again. So that's why we should care 

As it happens, the figure was benign, so the market ended flat. This is a concern because other data released was positive. The change in market sentiment now has gone from discounting bad news & rising to discounting good news & not rising, indicating that if there is a bit of bad data then the market is primed for a fall?.


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