August NFP Preview: Big Lie Coming

Jeff Saut’s got some great stats to bear in mind before tomorrow’s “big” August non farm payrolls – the one that will allegedly decide whether or not the Fed goes ahead with a rate hike. Turns out August is the most revised month and it’s usually a nice sized leap upward.

So tomorrow, as with all NFP initial releases, will be yet another lie.

Check it out (bold is me):

Mark Twain once opined, “There are lies, damned lies, and statistics;” and that quote seems appropriate given tomorrow’s employment statistics. Will last month’s “blowout” number be revised? Will tomorrow’s report come in stronger than expected, or weaker than expected? Whatever the number, you can bet it will be a lie and subsequently revised again and again. Speaking of statistics, a portfolio manager sent me these interesting stats. I cannot give attribution because he didn’t tell who compiled them, but here they are: 1) Reuters’ poll consensus calls for August NFP growth of +180,000. Vintage reports have not shown initially reported August growth that high since 1998 (Reuters). 2) Eight of last 10 years have featured upward revisions to August payrolls, by an average +81,000. The two with downward revisions averaged -32,000. 3) BLS has revised August payrolls higher in 20 (80%) of the last 25 years, by an average +61,000. Years with downward revisions average -31,000. 4) BLS has revised July payrolls higher in 16 (80%) of the last 20 years, by an average +42,000, but revisions in 2008, 2009 and 2013 average -49,000. So tomorrow morning everyone awaits the numba’. 


Morning Track: “Statistics?”
Raymond James – September 1st, 2016


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