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Gold Index
August Employment Report Preview
Trading Importance: High
What You Need to Know: The August report is expected to mark the eighth consecutive monthly decline in nonfarm payrolls. That fact will command the media's attention, but what shouldn't be overlooked is that the expected decline of 75K positions represents just 0.05% of the nonfarm employment base. In other words, it's not a statistically significant decline.
Statistics like this underscore why the economic data overall continue to show an economy that is growing despite the many alarmist reports that would lead you to believe otherwise.
The Numbers:
| Friday, Sept. 5 | Time of Release | Consensus | Briefing.com | Prior |
|---|---|---|---|---|
| Nonfarm Payrolls | 08:30 ET | -75K | -60K | -51K |
| Unemploy. Rate | 08:30 ET | 5.7% | 5.7% | 5.7% |
| Hourly Earnings | 08:30 ET | 0.3% | 0.3% | 0.3% |
| Avg. Workweek | 08:30 ET | 33.6 | 33.7 | 33.6 |
Trading Pulse: The market has grown accustomed now to seeing modest declines in nonfarm payrolls. Arguably, then, it will take a payrolls decline that approximates 100K, or more, to incite some concerted selling interest. An unemployment rate that nears 6.0% is apt to elicit a negative response, too, given the concerns it would generate about consumer confidence and consumer spending in the months ahead.
The market, for the most part, seems conditioned to hear bad news on the employment situation. Better-than-expected data, therefore, holds the potential to ignite a broad-based rally given the weakness the market has exhibited so far in the holiday-shortened week.
Trading History:
| Report Month | Nonfarm Estimate | Nonfarm Actual (a) | S&P 500 Mon-Thursday | S&P 500 Day of Report (Friday) | 10-Year Note |
|---|---|---|---|---|---|
| July | -75K | -51K | +0.8% | -0.6% | +2/32 |
| June | -60K | -62K | -1.3% | +0.1% | -4/32 |
| May | -60K | -49K | +0.3% | -3.1%(b) | +29/32 |
| April | -75K | -20K | +0.8% | +0.3% | -24/32 |
| March | -50K | -80K | +4.1% | +0.1% | +27/32 |
| February | 25K | -63K | -2.0% | -0.8% | +9/32 |
| January | 70K | -17K | +3.6% | +1.2% | +4/32 |
| December '07 | 70K | 18K | -1.4% | -2.5% | +7/32 |
| November | 70K | 94K | +1.8% | -0.2% | -27/32 |
(a) Numbers in this column reflect the originally reported figure
(b) Oil prices surged $10.75 this day to a new record high on Morgan Stanley forecast that crude could hit $150 by July 4
Feeds!