The US Nonfarm Payroll Report for November 2009 came in with a surprisingly small loss of only 11k jobs.
This is a shocking development considering that earlier in the week, the ADP payroll numbers showed a decrease of 169k jobs.
As a trader, reading the headlines makes me feel relief, and the market appears to agree as the dollar caught a bid and traders piled on some risk.
However, looking closer, I am much more skeptical. First of all, these numbers are way out of trend. That makes me a little suspicious.
Take a look at this chart:
Notice how the latest numbers sort of jump ahead of the trend? It might seem like a small difference, but it makes me think that someone is packing the numbers trying make it look like things are moving faster than they are actually moving. My general opinion is that the country is not recovering as fast as the media would have you believe. It’s not that I don’t want to believe it, it’s just that my analysis of the situation says that there is much more recovery work to be done before a real recovery can be seen.
The other issue is that is that the numbers are adjusted by 30k by the mysterious birth/death model.
So, yes, the number is encouraging, but I’m not so sure that we should be celebrating from the rooftops just yet.
In the end, I can only say, be careful with what you believe. The market is the master. Today, the dollar rebounded from dark depths, but it is still deep underwater. Markets are thin this month with it being the end of the year. This is the perfect set up for volatile markets that make moves that no one really understands. Be very careful out there.