Will the Jobs Report Matter?

11/04/2013 12:01 am EST


Jim Jubak

Founder and Editor, JubakPicks.com

The monthly job report for October will finally be released on November 8 and MoneyShows's Jim Jubak analyzes what impact it may have on the financial markets.

For the week ahead, well, the only date that really sort of counts is November 8. This is the date when we finally get, it's been delayed, it's about a week late, we get the jobs report, the payroll numbers, the nonfarm employment, whatever you want to call it, for October. It's been delayed because of the government shutdown, but what's really important here is that, the question is, "How good is this data?" There's first of all, the question is it going to show a trend in one direction or another, and given the initial payroll's number, it looks like it ought to keep unemployment about flat with where it's been, shouldn't show a big acceleration or deceleration in the economy, so that's going to be sort of what the report itself says.

The question's going to be, whether anybody believes this report. I mean, we've got all kinds of glitchy data, you've got late data, you've got data that wasn't collected on time, you've got data that doesn't take into account different things, so we get a report, unlikely to show much change, and then it's going to be up to Wall Street to sit there, and economists, to sit there and go, "Okay, this means XYZ."

Right now, people seem to be thinking that maybe the Feds saw a stronger economy than they expected. After all, the Fed gets the data early, so maybe the thinking goes...there's something in this data that makes the Fed feel better about US economic growth.

I don't think that's true. I think the Fed was simply going from earlier data and saying well, we'll throw in a fudge factor for the government shutdown. It still doesn't look that bad, so we get the report on November 8, people interpret the he** out of it, and then we see where this leaves us, in terms of assumptions about when the Fed is going to start to taper off its $85 billion a month in purchases of treasuries and mortgage-backed assets, and that's what's really important in the short run anyway.

This is Jim Jubak for the MoneyShow.com Video Network.

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