TrimTabs Investment Research estimates that the U.S. economy added some 206,000 jobs in September. This is slightly lower than the ADP reading and down a bit more from the 231,000 that TrimTabs projected in August, which was of course much higher than the initial Bureau of Labor Statistics report.
TrimTabs says that its employment estimates are based on analysis of daily income tax deposits to the U.S. Treasury from the paychecks of the 139 million U.S. workers subject to withholding.
The monthly report warns that the markets are just about to lose the Federal Reserve in bond buying. It said:
“Employment growth last month was the lowest in three months. Nevertheless, it has averaged 204,000 per month this year, nearly double the pace of 116,000 per month in the same period last year. … Our high-frequency macroeconomic indicators turned less strong across the board in recent weeks,” noted Santschi. In a research note, TrimTabs explained that the TrimTabs Macroeconomic Index dipped slightly in recent weeks after a strong six-month run, growth in income tax withholdings has pulled back, and non-seasonally adjusted unemployment claims have turned less positive. … Financial markets will lose a huge pillar of support once the Federal Reserve stops printing money in October. Nevertheless, we think the Fed will be reluctant to raise the federal funds rate very much next year because the economy is so highly leveraged and inflation as the Fed prefers to measure it remains low.
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Our take is that TrimTabs did not come in too far off the mark, versus ADP, to create any serious estimates changing for Friday’s official payrolls report from the Labor Department. Bloomberg has the following estimates for Friday, with changes noted versus the unrevised preliminary report:
- Nonfarm payrolls expected to be 215,000 (up 73,000)
- Private payrolls expected to be 215,000 (up 81,000)
- Unemployment expected to be 6.1% (flat)
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