All eyes today are on tomorrow's jobs number

06/02/2011 1:46 pm EST


Jim Jubak

Founder and Editor,

If U.S. stocks hadn’t plunged yesterday on worries that the U.S. economy was slowing, you could bet that traders would be looking to sell today. The odds are that tomorrow’s reports on May jobs will be weak. Economists are looking for the private sector to have added 180,000 jobs in May. That would be a huge drop from the 268,000 jobs added by the private sector in April. (With state and local government cutting jobs as they cope with budget shortfalls, economists are focused on the private sector number to give them an idea of how the economy is doing.)

But no one is sure how much disappointment is already baked into the stock market after its drop on Wednesday. And while the trend in today’s trading favors the downhill direction, the uncertainty over how much disappointment tomorrow will be enough disappointment to keep stocks tumbling is cutting into the number of sellers today. As of 1:30 New York time the Dow Jones Industrials were down 0.31% and the Standard & Poor’s 500 was down 0.21%.

Let me give you an example of that uncertainty. If the jobs number tomorrow comes in at 220,000 private sector jobs created, would that be a big disappointment since it’s a 48,000 drop from the April number, or would it be a solid upside surprise since economists have cut their estimates for May to 180,000 private sector jobs?

There’s a good chance that negative sentiment will move the market lower as the day progresses since the odds as so high that the jobs number tomorrow will represent a big decline from April. But every point of decline today is another point that’s baked into the market before the 8:30 a.m. ET release of the numbers tomorrow.


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