Jobs report preview

The NFP Report will be out this coming Friday morning.  This is the labor report that estimates the number of jobs gained and the unemployment rate.  Our concern is the number of jobs, which we get an inkling of by watching Payroll Tax Receipts as reported by the U.S. Treasury in their “bank account”.

The January number of new jobs was stronger than expected and was quite a surprise.  Thus far the financial press is forecasting about 60,000 new jobs for February.  Our estimates are for jobs to be 128,000.  To understand our process, you might look at our recent posts of Payroll Tax Receipts Growth in this venue.

What could go wrong with this estimate: There are thousands of Homeland Security employees currently not receiving payrolls because of a government shutdown.  Should that shutdown last another week, many of those employees will take up second (part-time) jobs in the gig economy, just to have a paycheck.  Should that happen, look for further distortion in the dichotomy of full- vs. part-time employees.  So, it’s a bit of a mess, but our numbers are 128,000.  The bottom line is that underlying labor demand is stronger than headline surveys suggest.  Thank you.