If there is one common theme across sellside previews of tomorrow’s nonfarm payrolls number, expected at 180K after a surprising jump to 209K in July, it is to brace for disappointment, or in Wall Street parlance, “downside risks.” And it’s not because of Harvey which hit the US far too late in the month to be reflected in the monthly payrolls.
The simplest reason for tomorrow’s miss is shown in the following Morgan Stanley chart, which predicted the July 209K print with dead-on precision, and which extrapolates the recent Y/Y slowdown in job growth to only 136K jobs in August (which, in the current “bad news is good news” environment, should be sufficient to send stocks to new all time highs as it will mean an even greater delay by the Fed).
This post was published at Zero Hedge on Sep 1, 2017.
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