There are estimates ranging from NFP Summary: -250k on the low end, to 50k on the high end for Friday’s release of the NFP number.
One of the wild-cards that is being considered this time around is the government census hiring and firings. Since most of the temporary census workers will be let go by August, there is a strong belief that over the next three NFP reports, close to 600,000 will be removed. Most economists have looked at these additions over the past few months as temporary and ignored the headline number. Of course, not President Obama or his administration. No. They have been steady with their comments that we are seeing real and sustainable job growth.
But, with the recent ADP Private payroll report showing a paltry 16,000 additions for the month, there is a very slim chance that there will be a great deal of happiness when the report is released. We are estimating that we could see a -185,000 print. That would be a very small gain from private and a net loss from the census firings. Of course, the government could extend the census numbers into next month, but we do not think that is probable.
Usually, there is a strong correlation with the ADP numbers and the private report in the NFP release, but not always. Even so, by looking at the initial and continuing claims, along with many of the other indicators of late, it would appear that there is a slim chance that we would see a large build in the private payrolls. In particular, while manufacturing payrolls have seen a sharp growth over the past month, the latest readings on the manufacturing sector have been slowing.
In addition, while polls have shown that managers have been much more confident and their outlook on hiring has strengthened, only a small handful have actually stepped up to take the plunge as there are many unknowns that are still lurking about in the economy. Europe, oil spills, regulation, legislation, taxes etc.
Obviously, the U.S. economy is in an uneven recovery and that is going to be reflected in the jobs reports. Last time around, we had the first showing on a positive basis that was impressive, even as most were temporary workers.