One of the big questions on everyone’s mind lately is when the Federal Reserve will taper quantitative easing (QE), or the Fed’s effort to stimulate the economy by buying bonds and lowering interest rates.
Traders and economists believe this week’s jobs report will have a big impact on the Fed’s decision to taper soon versus later.
But UBS’s Art Cashin notes that traders won’t be looking at just the number of jobs added. Rather, they will be paying close attention to hours worked.
Everyone and their sibling will be zeroing in on Friday’s Payroll Data as the magic answer on the recent tapering debate. That seems strange given the rather random nature of those figures and their frequent revisions. Traders will measure changes in payrolls versus hours worked. Recently, as new hirings were made, the hours worked decreased. Initially, traders thought that was new workers deceasing the overtime of existing staff. Now there is watering hole speculation that employers are cutting “hours worked” to make workers look more temporary and slip under Obamacare taxation. It’s any interesting arbitrage that we may explore further.
From the start of 2014, employers with more than 50 employees will be fined $2,000 per employee, if they fail to offer full-time employees health insurance. Workers are considered to be full-time if they work over 30 hours a week. This is a trend that Capital Economics’ Paul Ashworth recently addressed in a note to clients.
Business Insider Emails & Alerts
Site highlights each day to your inbox.