EMPLOYMENT FRAGILE, BIG IMPROVEMENT EXPECTED TOMORROW
By Bondsquawk:
The market will get a reading on the pulse of the economy as both the Unemployment Rate and the Nonfarm Payrolls number will be released tomorrow. Expectations for the unemployment rate, which is a household survey, is for 9.8 percent for May after a 9.9 percent reading in April. The Nonfarm Payrolls, which counts the number of paid employees working part-time or full-time in the nation’s business and government establishments, is expected to show an increase of 520,000 according to consensus surveys after an increase of 290,000 in April.
A big surprise could be in store as BNP Paribas increased their Nonfarm Payroll forecast from 515,000 to 645,000.
In a briefing today on Census operations the Director of the Census Bureau indicated that they had paid about 568 Census workers in May. Given that they had hired 138k workers between January and April, that suggests a number for Census hiring in May of around 430k in Friday’s report. That is larger than the 300k we were assuming and would imply a total nonfarm payroll number of 645k including 220k on private payrolls and a reduction of 5k in state and local government workers.
Today, Automatic Data Processing reported that U.S. companies added jobs but less than expected. The employment increase for May according to ADP was 55,000 versus surveys of 70,000. While the increase was less than expected, the prior month’s numbers were revised upward to 65,000 from the initial reading of 32,000.
The number of Americans seeking jobless benefits last week fell by 10,000 to 453,000, according to a data release by the Labor Department. Economists surveyed projected claims would drop to 455,000, according to the median forecast. Here’s a Bloomberg TV video report detailing today’s numbers.
There will be a definite upward revision in the jobs numbers for May . There will be a minimum of 500k jobs added maybe more . But here is the breakdown :
1) 600,000 census jobs which are temporary and does not include rehires. Allegedly according to insiders the census bureau will fire and rehire the same employees 1,2 5 times or more in a month and count all the rehires of the SAME person as “new jobs”.
2) temporary jobs anywhere from 25k to 100k
So in reality there will be a loss of at least 100k jobs that will will be masked by points one and two.
The US government is not fooling anyone and the numbers at best are disingenuous and at worst dangerously and fraudulently flawed.
From everything in the media it looks like the market has risen in anticipation of a big number. Even if we have a big number it looks like the market might sell the news – that is what has been happening lately.