Analyst: Expect tomorrow’s net jobs gain to be … 54,000

posted at 3:21 pm on May 31, 2012 by Ed Morrissey

Really?  Expectations among economic analysts for tomorrow’s job number revolve around a mediocre 150,000, which an earlier CNBC report called “sharply higher” over April’s 115,000 added jobs, which is an absurd description; that’s barely outside of a margin-of-error revision.  Today’s even-more mediocre ADP report still pegged private-sector growth at 133,000, and while ADP tends to come in high, that would be a rather significant miss.

Still, MIG Bank’s Ron William tells CNBC that expectations are overstated, and that the trends and momentum portend a much lower level of job creation than even the water-treading level suggested by ADP.  In fact, it’s likely to get even worse this summer, and perhaps drop into negative territory:

When looking at an economic indicator from a technical analysis perspective, the factors to look at are key levels, changes in momentum, cycles and correlation, according to Ron William, a technical analyst at MIG Bank.

“Nonfarm payroll has been decelerating since the beginning of 2012,” William told CNBC.com. “The probability of an acceleration of that down move is high over the next two quarters.”

The data lost positive momentum after failing to hold above the 2011 high of 251,000, and has also remained beneath a multiyear ceiling of around 340,000. During January 2012 “the loss of upside momentum triggered a DeMark exhaustion signal,” he said.

An exhaustion signal usually indicates a reversal in the trend. The DeMark Indicators are a collection of sophisticated market-timing tools created by Tom DeMark over the course of nearly 40 years in the financial industry.

“The key level that everyone in the market should be focusing on [for nonfarm payrolls] is 54,000,” William added. “I think that over the multimonth period the probability favors that we test this area and maybe move into negative territory if it is confirmed.”

Over the next two quarters?  That’s exactly what the White House and Barack Obama’s campaign don’t want to hear.  They have insisted that Obama has built momentum for economic growth, and the winter seemed to have hinted at some kind of momentum shift to the positive.  Now we’re looking at the potential for job numbers to return to sub-100K growth levels, and potentially back in the red.  That’s not the kind of momentum that wins elections.

On the other hand, reader and commenter DogSoldier wonders whether this might be a bit of an expectations-management game in the investor community.  By getting a worst-case scenario on the table today, a mediocre result tomorrow might do less damage.  I’m not sure that the difference between the two points is significant enough for that to work, though, since even a 150K result will look stagnant and breed pessimism about summer growth.

Let’s take a poll to predict tomorrow’s numbers.  Rather than guess the rate this month, let’s focus on net job growth in tomorrow’s report.  What level do you expect to see? I’ll predict a net job gain of 90,000 and an unemployment rate of 8.2%.


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Comment pages: 1 2

malclave on May 31, 2012 at 6:19 PM

If there’s one thing that the PBHO administration excels at, it’s imaginary numbers :-)

MJBrutus on May 31, 2012 at 6:21 PM

Rather unlikely; the ADP report is not usually that far off, and while the public sector is still shedding jobs, it is not likely that we lost 50-60K of them in May. We’re looking for somewhere around 115-120K jobs gained, which is anemic but still positive.

TouchdownBuddha on May 31, 2012 at 6:30 PM

They have insisted that Obama has built momentum for economic growth, and the winter seemed to have hinted at some kind of momentum shift to the positive.

Haven’t we been hearing this line for the last three and a half years?

Happy Nomad on May 31, 2012 at 6:32 PM

We’re looking for somewhere around 115-120K jobs gained, which is anemic but still positive.

TouchdownBuddha on May 31, 2012 at 6:30 PM

Tell that to all those beyond 99er status.

Happy Nomad on May 31, 2012 at 6:33 PM

If there’s one thing that the PBHO administration excels at,it’s imaginary numbers :-)

MJBrutus on May 31,2012 at 6:21 PM

U3 = j-axis.

Red Creek on May 31, 2012 at 6:50 PM

I’m sorry, counting people protesting (those OWSers) who are on the union payroll under the table doesn’t count.

ProfShadow on May 31, 2012 at 7:05 PM

50 – 75.

Revised Down.

Tim_CA on May 31, 2012 at 7:12 PM

50 – 75.

Revised Down.

Tim_CA on May 31, 2012 at 7:12 PM

f(x) where x is f(x).

Obama is such a poser. Clinton would have gotten pi in there. :)

Axe on May 31, 2012 at 8:02 PM

Does it matter? For wealthy individuals, as well as businesses, it only affects the day it comes out, maybe lags to Monday. For everyone else it’s not relevent because it’s never accurate. It’s a fun game but government says whatever whenever, and ‘economists’ don’t know as much as people give them credit for.

currency debasement, business efficiency, foreign out-sourcing, regulations. So basically inflation and doing more with less = job crunch. I include Tax Code with “regulations”.

John Kettlewell on May 31, 2012 at 9:43 PM

As Obama’s policies prove more and more successful expect GOP to try to claim ownership of them.
 
lester on May 8, 2012 at 8:49 PM
 
rogerb on May 31, 2012 at 3:25 PM

 
I saved the auto industry.
 
- Mitt
 
lester on May 31, 2012 at 5:09 PM

 

You’re doing it wrong.
 
Don’t paraphrase. Quote directly the things that contradict, disarm, or embarrass borderline-religious ideologies, and quote the people you know will read them (or will at least be amused by the hypocrisy). Mitt probably will never read your posts, so there is little chance that he’ll examine his position or your cleverness in drawing shame and attention to his hypocrisy on the matter. Even less so since those aren’t his actual words and he can merely assume you’re a low-info MSNBC/huffpo ideologue.
 
Also, it needs to be somewhat related to the thread. Paraphrasing someone with a random auto industry non-quote on a two-page thread about job predictions lacks a bit of weight and effectiveness.

rogerb on May 31, 2012 at 9:44 PM

Can we bet on this number too?

http://data.bls.gov/timeseries/LNS12300000

I bet we lose another tenth of a percent putting us 0.1 above our 25+ year low (which happened one month each in 2009 and 2010).

Before that you have to go back to August 1983 to find a number this low… but we’re on “the right track”… right guys?

gekkobear on May 31, 2012 at 11:53 PM

What the ????

Job creation for May, 69,000.

Employment Population ratio; up 0.2%.

SO 69,000 is 0.2% of the population over 16?

.002 * X = 69,000

And we’ve got 34.5 million people in America? That seems wrong.

Weird, we had 311.5 million people a couple years ago during the census… when did we kill off a huge chunk of the population?

gekkobear on June 1, 2012 at 8:23 PM

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