The Non-Farm Payrolls Report for November will be released on Friday 5 December at 8:30 AM EST.
The consensus of economists is for a loss of 325,000 jobs, as compared to October's loss of 240,000 and September's loss of 284,000 which are likely to be revised with this report.
Here are our projections with the usual caveat that the numerous large 'adjustments' and revisions to this report make it very difficult to forecast with any reliability.
The imaginary jobs added, alternatively known as the "Birth-Death Model" of phantom businesses should be a relatively inconsequentional addition of 29,000 jobs into the pre-seasonally adjusted number. If it were added to the seasonally adjusted number it would be significant.
More important is the seasonally adjusted 'headline number' which we think will come in close to consensus with a loss of about 305,000 to 320,000 jobs. There is potential downside to this number depending on how they revise the October loss of 240,000. As you can see we are assuming they revise it much lower to a loss of around 310,000. The spin will be that the job losses are 'bottoming.'
The Bush Administration might choose to hit the numbers quite hard with a worst case adjustment down to the -400,000 level and then show a gradual improvement into the end of the term of office to make the case that the economy was bottoming and improving when handed over to the Democrats.
Conversely, a 'hot number' of a decline of only 260,000 or thereabouts with a stiff downward revision to October would set up the spin of a 'market bottom' and a strong rally. If you have not notice the smart money has been unloading stocks with some initiative the past few months, taking profits where possible in anticipation of an increase in taxes on capital gains and the wealthy under the incoming presidential administration, which is not a bad assumption.
The first scenario of a 'bottoming' around the 300,000 lost jobs level seems most probable despite these other possible outcomes. We won't be willing to bet on it however.
Its Machiavellian we know, but that's the way it is, and has been, and the way we see it based on everything we know.
And finally, the projected adjusted and actual numbers just to emphasize the huge seasonal adjustments that are being made, beside the historical revisions.
The government numbers have become distorted and less reliable over time, starting with some vigor in the Clinton Administration. Reacting to single number events is almost nonsensical but that is how the Wall Street speculation game is played these days. As Dr. Greg House says, "everyone lies" and that seems to be the case more often in these times, especially for those in positions of power.
The most important number is the longer term trend, which we suspect will remain lower until the economy bottoms. In fact, we expect a real bottom here to be an indicator of a nascent recovery as it was a sign of the top.
