Friday, August 3, 2012

Futures up strongly ahead of the jobs report

Outside of the fact that other traders look at and react to the data, I for one do not know why so much emphasis is placed on the monthly jobs report. The numbers are continually tweaked, have a significant standard error in any one monthly estimate, and are largely marked-to-model (i.e. fantasy). In fact, the BLS reports that more than 1.2 million jobs out of 4 million (not seasonally adjusted) were created in newly started businesses in the last year.


This assumption seems far-fetched given the state of the slow-growth economy and lack of available credit.

In any event, the Street is looking for a net creation of about 100 thousand jobs. Your guess is as good as mine as to the market's reaction. Ahead of the announcement, the futures are indicating a strong stock market opening.


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