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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: excardog who wrote (1161)	3/3/2004 10:07:23 PM
From: mishedlo	Respond to of 116555

I am not talking about the spin on job, I am talking about reality. If we make the expected number it will really suck but they will brag about it. Mish

To: excardog who wrote (1161)	3/3/2004 10:56:51 PM
From: mishedlo	Respond to of 116555

The cynical side of PPI Message 19874788 (for the record, this makes sense to me. Kill a shocking PPI with bad jobs data) M

To: excardog who wrote (1161)	3/3/2004 11:26:07 PM
From: mishedlo	Respond to of 116555

Brian Reynolds on the ISM The ISM services index for February came in at 60.8, down from 65.7 and below the Bloomberg consensus of 63.5. This was a soft number: New orders fell from 64.9 to 60.3, while employment fell slightly from 53.4 to 52.7. The soft orders component is consistent with other recent orders data, and is consistent with our view that production has outstripped consumption enough to create a mini-spike in inventories that will lead to at least a moderation in production. That should have been enough to lift bond prices, and the 10-year Treasury did initially go from down 1/4 point to down 1/8 point on the headline. However, we have noted how negative investor sentiment is toward Treasuries, and the selling quickly resumed, taking Treasuries to down 3/8 of a point on the day. Expectations for a strong employment number continue to grow. While the published Bloomberg consensus remains stuck at 130k, we have heard whisper numbers far in excess of that. The sentiment seems to be that we will see a such a strong payroll number that the Fed will be forced to tighten. Fed Funds futures implied yields for the second half of the year are up another 1.5-2.5 basis points this morning. While a strong employment number is possible, the higher the whisper number goes, the harder it will be to have an upside payroll surprise and the easier it will be to have a disappointment. In any event, one strong payroll number will not cause the Fed to tighten and, if new orders continue to roll over, it will become harder for strong employment gains to persist.

To: excardog who wrote (1161)	3/3/2004 11:48:21 PM
From: mishedlo	Respond to of 116555

Northern Trust commentary on Employment [This is a good report but I had tons of difficulty with this PDF. Had to shut most other stuff down to see it] northerntrust.com Click on March 2 commentary One small snip below Employment in the Current Cycle – We are forecasting the unemployment rate to rise to 5.7% in February and payroll employment to advance by 100,000. The consensus forecast is marginally different with an unchanged unemployment rate at 5.6% and a 128,000 gain in payroll employment. The employment situation is a crucial part of FOMC deliberations. Fed rhetoric and “political correctness” suggest that the FOMC is likely to stay on the sidelines until there is a meaningful pickup in employment. In recent months, employment has been a major issue in discussions about the current status of the U.S. economy due to the disparity in messages from different employment reports. We looked at various employment measures in an historical perspective and conclude that they share a similar message – the weakest performance on record in the post WW-II period. Nonfarm payroll employment, which is based on a survey of firms, shows outstanding weakness. Nonfarm payrolls increased 112,000 in January, following an average monthly gain of 63,500 jobs in the last four months of 2003. Nonfarm payrolls have fallen each month in the November 2002 – August 2003 period. This sluggish performance of payroll employment is at odds with the recent decline in the unemployment rate and downward trend of weekly jobless claims numbers.