Everyone cheered when the Bureau of labour Statistics told the world that the U.S. had added 243k jobs and the unemployment rate fell to 8.3 per cent in January.On Thursday, we learned initial weekly unemployment claims fell to 348k, the lowest level since March 2008. We also learned that the Philly Fed Index jumped to 10.2, beating economists’ estimates.
The index, based on a survey of employers’ hiring plans, has been tightly correlated with the NFP numbers. And on Thursday the Philly employment index tanked from 11.6 to 1.1 … This suggests February jobs gain of just 50,000, a huge drop from January’s 243,000.
… Ablin: “I’m not sure where economists’ estimates are yet for February jobs. But they were 100K short last month and now they may wind up overestimating the number. … What [the Philly Fed] is doing is asking respondents if they are going to add or get rid of jobs.
“It looks like they are saying they are still adding, but very few. … And if you look at corporate income statements, they have cut pretty much everything they can cut, cost-wise. And they have a lot of operating leverage. … But if revenues don’t come through, they will just sit there. I won’t worry about one 50,000 jobs month too much … But I do hope the Philly Fed is wrong this time.”
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