Investors are looking for a big rebound in jobs this month following the disappointing January that many attributed to snowy weather. The Wall Street consensus is looking for 180K and Wells Fargo agrees:
“With recent nonfarm payroll reports sending mixed signals between the establishment and household surveys, market watchers are looking intently at other employment indicators to decipher the true underlying trend in employment. One reliable forward-looking indicator, the four-week moving average for initial jobless claims, has edged lower in recent weeks. While weather may be a factor, the consistent downward trend in claims is still encouraging and suggests an improving labor market. Another good sign is the strength in private-sector payrolls. Although the private sector added only 32,000 jobs in January, we expect hiring to pick up. Private-sector employment should average around 150,000 jobs in 2011, which should be enough to sustain the recovery. We expect nonfarm payrolls to increase by 180,000 jobs in February and the unemployment rate to remain unchanged at nine percent.”
Jobs remain the one stubborn missing component of a sustained recovery. Even at 180K we will be below levels that can meaningfully reduce the output gap, however, any growth in jobs at this point is viewed as a positive.
Source: Wells Fargo
Mr. Roche is the Founder and Chief Investment Officer of Discipline Funds.Discipline Funds is a low fee financial advisory firm with a focus on helping people be more disciplined with their finances.
He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance, Understanding the Modern Monetary System and Understanding Modern Portfolio Construction.