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By The Numbers…
January 5th, 2012 | 
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ADP today reported that employment in the U.S. nonfarm private business sector increased by 325,000 from November to December on a seasonally adjusted basis. The estimated advance in employment from October to November was revised down slightly to 204,000 from the initially reported 206,000.
Good Lord; the futures spiked, of course, when that hit the tape.
Let’s look at the table:
I’m not sure I believe it, quite bluntly, but if this is real we should see a +250k print tomorrow, more or less.
Again, this is very, very suspect and way outside expectations — including mine, but forces an expectation of +250k for tomorrow, irrespective of what I believe and what the claims and other economic data tend to indicate.
In terms of the markets the instant reaction almost completely erased what was a quite-negative premarket that had developed as a consequence of concerns over Europe. It will be very interesting to see if it holds up — the S&P channel looked to be about to violate (badly) this morning on the open, but with this report we may have just seen a nice “save” for today.
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Next, we have Unemployment claims:
And to top it off we have a claims number this morning…
In the week ending December 31, the advance figure for seasonally adjusted initial claims was 372,000, a decrease of 15,000 from the previous week’s revised figure of 387,000. The 4-week moving average was 373,250, a decrease of 3,250 from the previous week’s revised average of 376,500.
Heh that’s really good, right? Sure looks like it….. so what’s this?
The advance number of actual initial claims under state programs, unadjusted, totaled 535,112 in the week ending December 31, an increase of 37,423 from the previous week.
Uh, yeah.
We’ll see how this seasonal adjustment works out. The Labor Department does seem to do reasonably well at smoothing things over the year, but this number is particularly important due to the ADP release.
The big table is not very interesting this week; remembering that this is for the week of the 17th, it is basically flat, down 8,311 from the prior week across all programs.
My macro-level view for the number tomorrow would be around 100-125k, but that ADP number is so far out of whack that I have to run with a +250k estimate (with the usual 50k error band either side) even though I don’t believe it.
I’ll be very interested in the household data tomorrow, especially if there is divergence with the official establishment results.
Stay tuned.
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Then, we have Non-Manufacturing ISM:
The Non-Manufacturing ISM was reported this morning at 52.6, and said:
The report was issued today by Anthony Nieves, C.P.M., CFPM, chair of the Institute for Supply Management™ Non-Manufacturing Business Survey Committee. “The NMI registered 52.6 percent in December, 0.6 percentage point higher than the 52 percent registered in November, and indicating continued growth at a slightly faster rate in the non-manufacturing sector.
Eh. Look, I need to see something that confirms this ADP services employment index. Is it there?
| Employment | 49.4 | 48.9 | +0.5 | Contracting | Slower |
No.
In fact, ISM Non-Manufacturing claims that employment is contracting in the services sector.
In addition:
| Backlog of Orders | 45.5 | 48.0 | -2.5 | Contracting | Faster |
Pull the other one ADP.
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Put them all together, and what do you get?
With Non-Manufacturing ISM’s increase (purportedly showing continued growth which is faster than expected) ADP’s additional 325,000 Non-Farm Jobs (seasonally adjusted of course) and the Initial Claims Report (showing further declines in the newly unemployed) one would be lead to believe we were off to a great start in 2012.
Maybe we should think again, knowing what we know about government figures and the current global economic climate.
Perhaps these numbers, tweaked prior to release as they are, are intended to portray exactly that…Bunnies and Kittens and Rainbows for All!…while those “in the know” continue to prepare their bunkers against global economic collapse. Perhaps all of this rosy information is intended as reassurance to the masses that it is safe to get back into the financial waters, and invest again…so “they” can trade against you, leaving you broke and ill-prepared for the collapse “they” KNOW is coming.
Perhaps the numbers are real, and we really ARE having a great start to 2012.
Time will tell…do you want to risk being wrong now?
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