Large Discrepancy in Jobs and Unemployment Data

The game of predicting the Labor Department’s data on Non-Farm Payrolls and Unemployment before the first Friday of each month is truly nothing more than a game.  Estimates fluctuate wildly and there are more ‘pre-guestimates’ that create changes literally up to a few hours before the actual data is released.

This morning came word from ADP that it believes the private sector jobs were up by 91,000 and Dow Jones had estimates of about +75,000 for September.  ADP revised the August data lower by 2,000 to 89,000 versus 91,000.  Again, this is only the private sector so the total number from the Labor Department is different after you back out the government employment trends.

Challenger Gray & Christmas tracks the layoffs, and it reported that U.S. employers planned to cut more than 115,000 workers from the nation’s payrolls during September.  That is more than double what it reported in August and it is sadly the worst reading in almost two and a half years.  The only good news is that almost 80,000 of those cuts were from the U.s. Army and from Bank of America, and that means that not all of those cuts are coming all in one month.

But wait, there’s more… A report from TrimTabs Investment Research showed that the “withholding tax based employment model” said that the U.S. economy “added an anemic 64,000 jobs in September.”  It further noted, “While job growth was positive in September, it was not enough to offset the 125,000 jobs needed monthly to offset population growth. As a result, TrimTabs expects the unemployment rate to edge higher.”

As far as what to expect on Friday, Bloomberg sees estimates of Non-farm Payrolls being up 65,000 after a flat reading in August.  It also sees estimates for unemployment rising from 9.1% in August to 9.2% for the September reading.  Dow Jones has the estimates this Friday at +60,000 on Non-Farm Payrolls and a steady rate of 9.1% for unemployment.

JON C. OGG