Time to Shift Focus to Non-Farm Payrolls

March 4, 2008

It’s time to shift our focus to Friday’s non-farm payrolls report.

Tomorrow we are expecting a number of leading indicators for non-farm payrolls including:

1. Challenger Layoff report
Last month, layoffs increased 19%

2. ADP employment survey
Last month, ADP grossly overstated private sector payroll growth. They called for a rise of 126k. For Feb, they are looking for an increase of 18k

3. Service sector ISM will be the big market mover
The employment component will tell us whether US companies cut more jobs than they added in the month of Feb

The key question that these numbers will attempt to answer is whether we will see two back to back month of job losses. The market currently expects payrolls to rise by 25k which would be a rebound from the first month of net job losses in 4 years. If there is no rebound, then the US economy is in serious trouble.

Dollar bulls have alot more to lose than dollar bears tomorrow.

Posted in ISM Services, ISM manufacturing, non-farm payrolls, US Dollar