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  • Larry Green, CFA

Expect Weaker than forecast Non Farm Payroll adds of 146,000 for July, 2016

Expect Weaker than forecast NFP adds of 146,000 vs. the consensus forecast of 185,000. We are once again below the low Bloomberg forecast.


Larry Green, CFA –

Figure 1 – Active job postings are down again from last month continuing the downtrend

Our core analytics are based on the premise that company hiring is indicative of management's perception of the prospects for their business. A company that is posting jobs, expects to grow, and vice-versa.

This month, our core indicators (derived from the LinkUp RAW jobs dataset2) show the following:

1) Active Jobs Index continues down 1.3% m/m.

2) New JobsPosted, rebounded again from last month, up 15% from last month. Filled/Removed jobs also rebounded again up 10% from last month. These numbers are quite volatile month to month, but any time more jobs are being posted it is good. New Jobs caught up to Filled/Removed jobs.

3) Labor market slack loosened again slightly from record levels earlier this year.

The net is, jobs activity rebounded somewhat again from a very bad May, but at a slower pace than June. More Job postings were Created and Filled, with Filled about equal to Created (which is better than Filled outpacing Created). But active job postings in our index continued to decline.

We believe that the July 2016 NFP will be 146,000 net adds, and deliver a downside surprise to the consensus 185,000 job adds. We are once again below the low Bloomberg forecast of 150,000.

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