I’ve run my forecast and have come in a bit below consensus, at 170,000 for payrolls. Consensus, as you see below from the Bloomberg expectations, is for slightly over 200,000.
There’s still maybe some weather dampening the data, though less so than in previous months. GDP grew less than 3% in 2013Q4, and forecasts for Q1 I’ve seen range from 1.5% to the low 2’s–nothing too inspiring. There’s been a touch more wage growth but hard to see a ton of confidence from consumers’ perspective. In fact, both the expectations and the present conditions indices of consumer confidence are still below where they stood before the recession.
The 10-year bond yield is up 15 basis points over the month and just under 100 bps over the year. That’s not a bad thing at all and it’s what you’d expect in an improving economy. But it’s shown up in higher mortgage rates which have slowed housing down a bit. Case-Shiller home prices have flattened considerably over the past few quarters—again, not unexpected given their prior tear.
So I remain a touch bearish, but as always, there’s a lot of uncertainty around these numbers. The main questions re the job market, at least in my mind, are:
–what’s the underlying trend in payrolls: is it closer to 150K/month, as in pretty sloggy, or 200K, i.e., a better clip?
–if things really start to improve, will we pull more sideliners back into the job market? That’s a critical question with big macro impacts.
Friday’s data will contribute another piece to solving those puzzles, but they’re big puzzles and one month’s data yields a small piece.
I should be on CNBC when the numbers come out (8:30 on Friday), mixing it up with an interesting cast of characters, so see you there.