Today we get data releases from the Bureau Of Labor Statistics or as I often like to refer to it as B S Labor statistics.
History and in particular recent history shows that Non-Farm Payrolls is a terribly misleading indicator that is constantly revised- not least with the seasonal revisions today.
But none of that matters. the fact that the Emperor has no clothes is irrelevant. The market still reacts to this number and that is all that counts.
The recent print on Jobs Plentiful/jobs hard to get ratio (high posted at 47.10 in March 2022) in January (16.20 compared to the prior 22.2 and down from a peak of 31.7 in 2024 (Jan) again belies the 'strength" reflected in last year's NFP numbers.
Of course, that strength may be just about to get revised away like we saw last year for 2023.
The other big miss was the December JOLTS number where with a revision to 8,156k in November we then printed 7,600k. that was the 2nd lowest print in a down cycle from 12,182k in March 2022. We have now gone from 2 jobs for every person unemployed to just over 1 and if by any chance in the near future that number drops below about 6.886mm (Total unemployed at the moment) then we "Break the Buck"
The combination of these numbers suggests a downside miss is possible today (maybe even a big one) BUT as we well know any one number can come out anywhere and some of the best forecasters out there are actually looking for a number more lake last month's print. (Whisper is also around 200k)
That makes it hard to stay long Fixed income into the number despite my bullishness. Yields have fallen so far that even if I am right about a miss there could still be a danger of a buy the rumour sell the fact and people take back longs after the print.
Given that the whisper number is likely higher than the median forecast we likely stay stable to lower (yields) in Fixed income if we print as expected. If we print a high number (subject of course to what revisions we get) it could be an ugly F.I. day.
Of course, from a Fed perspective it is the "other survey" that counts - the Household Survey, as that reflects the unemployment report. The Fed is at pains to point out that it neither needs nor desires any incremental Labor market softness in pursuit of their mandate and a soft labor market is probably more likely to induce them to come back to the table than the present inflation picture.
In that respect let us not forget that the move down to 4.1% (which we have not managed to go lower since) was "assisted" by the completely non-credible growth in Government jobs of 800k in September. This survey does not get revised so all it served to do was artificially lower the base which has since held.
That may start to change given the "purge" now underway but that is for another day.
For now, we just need o get this number out of the way, analyse the bones and move on. I am biased that the sum of the various releases today will be more on the soft side and support the continuation lower of yields that we have been seeing and as mentioned in my piece yesterday a possible re-inversion of the 2's 5's curve
But it is not worth playing this ahead of today's numbers as a strong print with at least temporarily derail that move and in that instance potentially provide better levels to buy.
Today may be a better day to "do your taxes"
