Friday, January 10, 2014
??????This morning's surprisingly weak U.S. jobs report runs
counter to all recent economic data. The numbers seem unbelievable
as they are out of line with all data that we have seen lately.
Perhaps we shouldn't pay much attention to this report as it will
most likely get revised away in the coming months.
The bond market's reaction of pushing yields lower following the
jobs release appears over-done as the Fed is unlikely to change its
Taper plans on the basis of one-month data. This report aside, all
other data is consistently pointing towards positive momentum in
the U.S. economy. Wednesday's
) report, Thursday's Jobless Claims and lay-offs readings and the
employment components of the two ISM surveys were all foretelling
what we found in today's jobs report.
The U.S. economy grew at a robust +4.1% growth pace in the third
quarter and initial estimates for Q4 GDP growth were no better than
+1%. But those estimates started going up following a steady run of
better-than-expected economic readings, reflecting momentum in
consumer and business spending and less drag from trade and
We wouldn't know the Q4 GDP figures for another few weeks, but
current estimates are for growth in the +3%. If Q4 growth does come
in that vicinity, the economy's growth pace will have roughly
doubled in the second half of 2013 from the first half's pace.
Many in the market, the Fed included, view this to be the 'real'
underlying trend in the economy and would likely discount today's
jobs reading. That said, the unusually weak jobs report does add an
element of uncertainty to the economic landscape.
AUTOMATIC DATA (ADP): Free Stock Analysis
To read this article on Zacks.com click here.
Want the latest recommendations from Zacks
Investment Research? Today, you can download 7 Best Stocks for the
Next 30 Days. Click to get this free report
Director of Research