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Jobs Report – Ignore the Pundits, Look at the Big Picture

I don’t want to downplay what could be the most important economic report of the month, but I do want to downplay the analysis surrounding it.  Pundits will all come out saying the number is “better than expected” or “worse than expected”.  They will guess whether it is above consensus of 175K or below.  The reality is that no one knows.  This is one of the most unpredictable data points we get.  So, what do we know?

  • We know that jobless claims have been trending lower and lower and just recorded their lowest weekly reading since the recovery started.  
  • The ADP private payrolls report came in at 200K – very healthy.
  • The Challenger Job Cut report remains low and is showing 7.3% fewer layoffs through July 2013than the same period in 2012.
  • The July ISM employment reading was 54.4 – the highest reading in well over a year.

I don’t know what this morning’s employment report will say.  It might be lower than 175K or it might be higher.  But the overall data is telling a very clear story – the employment situation is improving (at worst, certainly not deteriorating).  I know it’s not ideal, but a big beat or a big miss isn’t going to change the multitude of factors confirming a moderately strong labor market.

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