Thursday, December 5, 2013

NFP guesstimate for November ...

Once again it is NFP time, as the 'official' state of employment report will be released by BLS on Friday morning (12/6).  We estimate net change of approx. +100K in NFP for the month of November, compared with the Street's +180K.  Indicators have provided a mixed picture:
  • Seasonally adjusted initial jobless claims declined in November; however, the non-adjusted figured increased slightly for the second consecutive month.
  • Number of new and total help-wanted online ads increased in November.
  • Regarding business activity and manufacturing surveys conducted by regional Reserve Banks, employee sub-indexes for NY, Philadelphia, and Dallas declined from the prior month while those for Richmond and Kansas City increased.
  • ISM manufacturing's employee sub-index had its largest increase since July, but the one for ISM non-manufacturing declined.
  • While the ADP figure is one of the best indicators, and beat Street's expectations for Nov. very easily, we have also noticed that it is being revised more often and the revisions are a bit more significant.  For this reason, we are discounting it slightly.

Again, we're thinking that the NFP increased by 100K in November from October.  Of course, these days given the continuing QE programs, bad news could be good news, and good news could also be good news for the equity market.  As the retail brokers say or imply: there's no risk; stay long and strong.  We think a market correction is needed and the higher the market goes, the more 'painful' the correction may become, in our opinion.

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