Friday’s job data may be too good to be true

The 517K non-farm payroll surprised the market. This beat the most bullish forecasts. However, has an interesting article suggesting that all is not as it seems.

The article cites three main reasons that the 517K is temporary:

  1. warm weather.

  2. The resolution of strikes in California.

  3. A seasonal adjustment.

Seasonal adjustments net off to zero, implying weaker future prints in the short-medium term.

Steve Englander, head of North America macro strategy at Standard Charted, also refers to the household survey. It suggests softness in payrolls and points to part-time jobs being created. Englander is also waiting for the Quarterly Census of Employment and Wages. This is released by the Philadelphia Fed and has found jobs to be overstated in the past. It is due to be released 22 February, and may raise questions regarding the NFP data.

Russell Shor

Senior Market Specialist

Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.

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