Jobs Data To Look For

This is an important week for economic data in the U.S., but not quite yet. This Friday morning, we shall see the latest non-farm payroll numbers and unemployment rate from the Bureau of Labor Statistics (BLS). We expect to see another strong month of jobs gains pretty much across the spectrum of domestic industries, with even Construction and Energy picking up some of their slack from earlier in the year. In the last read, the unemployment rate fell to 4.1% — the lowest read we’ve seen since the labor market was much, much smaller.

Typically, the Wednesday prior to the Friday BLS figures brings the private sector payroll report from ADP (NASDAQ:ADP) , as it does again this week. The over-under for the past several months (not counting temporary hurricane-related issues) has been around 180K new jobs in the private sector created each month.

A number like this again tomorrow will be consistent without robust labor market; north of 200K or even 250K would suggest something else in play here: the promise of a big corporate tax cut forthcoming would allow companies to build out their workforces, and those who want to get a head start on competition may have already begun hiring.

Also consider the seasonality effect in these broader jobs metrics — retail and delivery companies hire more workers around the holiday season: jobs for cashiers, security, merchandise loading and logistics all may get a bump. This would obviously be good, but not something to bank on into the early months of 2018.

Thursday we will see the Initial Jobless Claims read, and these numbers have been a little more turbulent of late, shaking out of the “normal” 225-250K range we’ve seen week to week over the past few years. Continuing claims have also been seeping up to the 2 million level of late, which is a total they have not reached in more than 30 weeks.

Today, we saw a fresh read on the October Trade Balance, which sank to a deficit of -$48.7 billion, notably below the previous month’s -$44.9 billion. This is the deepest hole we’ve seen since January of this year. Importantly, one of the main criticisms about the new (forthcoming?) tax plan is that it dumps another $1-1.7 trillion onto the nation’s credit card over the next ten years. So if a dip of nearly $4 billion month over month concerns you, how much must you feel the proposed tax legislation will affect you (and the country)?