Monday, February 4, 2013

January NFP & Mfr. ISM ...

Well, we certainly cannot claim "accuracy" to be our middle name when it comes to projecting the latest macro indicators.  On Friday, January NFP came in below our estimate while ISM manufacturing blew away our what appeared to be a pessimistic type of projection. 

The state of employment report for January included NFP change of +157K and the official unemployment rate of 7.9%.  NFP was 18K below our estimate and the Street's.  We must say that given the prior two months' significant upward revisions, our NFP estimate cannot necessarily be thought of as too optimistic.  November and December NFP counts were revised up by 86K and 41K, respectively.  However, as we noted last week, based on the late January initial jobless claims data, we could see a slowdown in or reversal of NFP's last few months' upward trend. 

January manufacturing ISM of 53.1 certainly surpassed the Street's 50.7 and our 49.0 estimates.  This was driven mainly by growth in new orders and inventories.  The employment sub-index also ticked up a bit.  In fact, this sub-index has been increasing for the past 40 months.  Given further contraction in backlog of orders and continuing increase in customers' inventories (although not significant), we do not expect such positive impact from the inventories sub-index in the February numbers. 

The week of 2/4 appears to be a bit light compared to the prior week.  The only market moving macro indicators scheduled to be released are the non-manufacturing ISM (2/5) and weekly initial jobless claims (2/7). 

Lastly, congrats to the Super Bowl 2013 champions, the Baltimore Ravens.  We just hope the Jets will get at least an average QB one day so they could have a chance to accomplish what the Ravens just did.

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