Full Employment & Jobs Report Expectations For This Packed Week

Many investors, traders, and speculators may just be coming back from their holiday or a long weekend, but this week is the first trading week of the month and that brings up many key jobs reports.  As far as why this matters so much this week it is simply that there are only a couple more reports before the 2012 elections.

24/7 Wall St. has created a general calendar of what to expect, when each report is expected to come out, and why each matters.  There are some key nuances that need to be considered on each report due to the calendar.

The first real labor report came from the ISM report on Business today.  While it was above 50.0% it was the lowest ISM manufacturing reading in way too long.  The next set of data on employment will be on non-farm productivity and unit labor costs on Wednesday morning.  Be advised that this is a second quarter reading, so there has been two months more worth of economic data around jobs.  The competition of productivity over new jobs creation is a longstanding battle.

On Thursday is when the real flow of reports will start to hit.  These are also the freshest jobs reports for August.  At 7:30 AM EST comes the Challenger Job-Cut Report, followed by the ADP Payrolls data at 8:15 AM EST.  The first has no estimates from Bloomberg, but the ADP report from Automatic Data Processing, Inc. (NASDAQ: ADP) is expected to fall to 149,000 from 163,000 in July (Bloomberg estimates).

At 8:30 AM EST on Thursday comes the formal weekly jobless claims report from the Labor Department.  It is this report which will act as the last official look at Labor Department data ahead of the Friday jobs report.  Bloomberg is expecting a reading of 370,000 versus the prior week’s unrevised projection of 374,000.  Here we would caution that the data was based upon the week ahead of Labor Day and that is a week when many employees are not even in the office.

Another report will come on Thursday at 10:00 AM EST from the ISM.  This is the non-Manufacturing Report on Business and it will include employment data.  The expectation is that growth has remained overall (Bloomberg sees 53.0 for August versus 52.6 from July) but we would note that the manufacturing overall reading was in decline for the third month.  We do not have a formal estimate on the employment gains in August as that is one sub-index of a larger index reading.

On Friday morning we will also get a pre-employment reading as the Monster Employment Index precedes the formal employment report.  This report from Monster Worldwide, Inc. (NYSE: MWW) rarely has an impact any longer.

The real employment report is the Employment Situation report from the U.S. Labor Department due Friday morning at 8:30 AM EST.  That is the real deal for the markets.  We would caution that August can be a big wild card as it is a slow month for business.  Bloomberg estimates are bracing for 125,000 new jobs created in August after the prior month of July came in unexpectedly higher at 163,000.  The official unemployment rate is expected to have remained flat at 8.3% in August and we would note that Bloomberg also expects that the private sector jobs created came to 134,000 in August after a reading of 172,000 in July.

That is what Wall Street and Main Street have to look forward to this week on the employment front.  Stay tuned!  After all, your money matters.

JON C. OGG