Unfortunately, due to some unexpected events, we were not
able to provide our projections for Nov. ISM.
Manufacturing ISM missed expectations, while services ISM beat the consensus.
However, we found some time to run our employment models. The results are as follows: for Nov. we expect
BLS to report an increase of 70K in the NFP count. Our forecast is slightly below the 80K
consensus.
Obviously, the Sandy storm
impacted the NFP numbers. The storm was
also an excuse used by Moody's on Wednesday morning to describe why ADP came in
below expectations, even though most economists had already included an estimated impact of Sandy in their projections. We note that
weekly released initial claims had already climbed above the critical 350K
level (seasonally adjusted) approx. 3 weeks before the storm hit the east
coast. In addition, those claims have
remained near the 400K level even 4 weeks after Sandy. Simply put, while Sandy impacted
employment numbers negatively, we do not think it was as significant as it has been
presented to us by the main uber-bullish, very popular and colorful US
financial media outlet. For this reason, we do not expect a significant bounce in the Dec. NFP count.
Nov. employment
report will be released on Friday (12/7) at 8:30AM (ET).
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