financialsense.com / By Lee Adler / March 6, 2013
The headline nonfarm payrolls number will beat the consensus economists’ forecast of a gain of 165,000 reported by major financial media organizations. That’s based on this chart showing the ADP private payrolls data for February along with the BLS nonfarm payrolls data.
With the caveat that the ADP data is highly idealized, smoothed, curve fitted, abstract impressionism, so is the BLS headline number. The BLS makes no secret of the weakness (see paragraph. 4) in this method, beginning with the fact that the statistical margin of error is +/- 100,000 and that the seasonally adjusted number will be revised not only next month but every year for the next 5 years as they hone in on what the number actually should have been. Meanwhile, all the Wall Street pros watch and try to guess the headline number within 10,000 or so. In reality, any guess that comes within 100,000 of the first headline print is a good guess, but the market often behaves as if it’s a huge miss or beat. A huge beat looks more likely than a miss this month, based on a graphical forecast that I just did with my Etch-A-Sketch program, projecting the BLS forward based on the information from the ADP survey.
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