Looking Ahead to Jobs Data

Tuesday, December 5, 2017

This is an important week for economic data in the U.S., but not quite yet. This Friday morning, we shall see the latest non-farm payroll numbers and unemployment rate from the Bureau of Labor Statistics (BLS). We expect to see another strong month of jobs gains pretty much across the spectrum of domestic industries, with even Construction and Energy picking up some of their slack from earlier in the year. In the last read, the unemployment rate fell to 4.1% — the lowest read we’ve seen since the labor market was much, much smaller.

Typically, the Wednesday prior to the Friday BLS figures brings the private sector payroll report from ADP ADP, as it does again this week. The over-under for the past several months (not counting temporary hurricane-related issues) has been around 180K new jobs in the private sector created each month.

A number like this again tomorrow will be consistent with out robust labor market; north of 200K or even 250K would suggest something else in play here: the promise of a big corporate tax cut forthcoming would allow companies to build out their workforces, and those who want to get a head start on competition may have already begun hiring.

Also consider the seasonality effect in these broader jobs metrics — retail and delivery companies hire more workers around the holiday season: jobs for cashiers, security, merchandise loading and logistics all may get a bump. This would obviously be good, but not something to bank on into the early months of 2018.

Thursday we will see the Initial Jobless Claims read, and these numbers have been a little more turbulent of late, shaking out of the “normal” 225-250K range we’ve seen week to week over the past few years. Continuing claims have also been seeping up to the 2 million level of late, which is a total they have not reached in more than 30 weeks.

Today, we saw a fresh read on the October Trade Balance, which sank to a deficit of -$48.7 billion, notably below the previous month’s -$44.9 billion. This is the deepest hole we’ve seen since January of this year. Importantly, one of the main criticisms about the new (forthcoming?) tax plan is that it dumps another $1-1.7 trillion onto the nation’s credit card over the next ten years. So if a dip of nearly $4 billion month over month concerns you, how much must you feel the proposed tax legislation will affect you (and the country)?

Mark Vickery
Senior Editor

Questions or comments about this article and/or its author? Click here>>

Zacks’ Best Private Investment Ideas

While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public.
Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors.

Click here for Zacks' private trades >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
SPDR-DJ IND AVG (DIA): ETF Research Reports
 
NASDAQ-100 SHRS (QQQ): ETF Research Reports
 
SPDR-SP 500 TR (SPY): ETF Research Reports
 
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research
 
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report