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Be Ready For The Unemployment Report

The markets received the Jobless Claims report this morning at 8:30am ET.  This number was poor, showing an increase in filings for unemployment to 479,000 last week.  Economists had expected a number in the range of 450,000 - 460,000.  Jobless Claims continue to be stuck just under 500,000 and show little adjustment down.  This tells Wall Street that job growth will continue at an extremely slow pace, if at all. While this data was ugly, the markets are only down slightly as light volume takes over ahead of the next big report.  The SPDR S&P 500 ETF (NYSE:SPY) is lower on the day, trading at $112.46, -0.51 (-.45%).

Tomorrow the Non Farm Payrolls and Unemployment Report will hit the markets at 8:30am ET.  This is what the markets have been looking forward to all week.  Expect a solid move in the markets on decent volume for the first couple hours.  After that, it is likely volume will die out and the markets will go to sleep early for the weekend.  Economists are expecting a Non Farm Payroll number showing a loss of 85,000 - 100,000.  The loss is expected due to government census layoffs.  The market will be looking at the number minus the census layoffs to determine whether or not to shoot the markets up or down.  Also, watch the private sector employment within the non farm payrolls.

Most of the media will hype up the Unemployment Report.  It is expected to be around the 9.5% level.  While this number is hyped by the media, it is actually the worst example possible of those in or out of work due to the way it is calculated. When things are ugly in the economy, many people stop looking for work and just sit home. In other words they give up hope of finding a job.  If they are doing this, they are not calculated in the Unemployment Report.  If someone is working part time because they cannot find full time work but must pay the bills somehow, they are not included either. There are many other factors that make that Unemployment Report very misleading. I am here to keep the hype away and give you the low down dirty truth.  To get more information, guidance, swing trades and education, join the Research Center.

Gareth Soloway
Chief Market Strategist