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11 Sep 2013
Flash: NFP not as bad as it seems - Nomura
FXstreet.com (Barcelona) - Despite the 169k print in the latest NFP vs 180k expected, with the most disappointing part being the downward revision of 74k to the two prior months headline figures, according to Nomura Economists, a more in-depth analysis into the data show that approximately 70% of the downward revisions to July's report were primarily concentrated in three sectors: auto and parts manufacturing, federal government and educational workers for state and local governments, thus the downward revision might not reflect any fundamental weakness, Nomura notes.
Key Quotes
"The downward revisions may not reflect any fundamental weakness in the underlying trend, but rather, it might be capturing spurious volatility caused by seasonality issues."
"For example, it is quite difficult to seasonally adjust fluctuations in employment at automobile and parts manufacturers as most auto and auto-related companies shutdown production in July to retool and perform maintenance for the new model year. Moreover, the decline in federal workers could have been related to layoffs associated with sequestration."
"The standard deviation of monthly changes in S&L governments’ educational workers by month, tends to be most volatile in July, indicating that there may be some timing issues around the end of school year and the beginning of summer break-"
"Moreover, while the August nonfarm payrolls showed a smaller-than-expected increase, historically, August (and to a
lesser degree, July) numbers tend to be revised higher in the second and third estimates. Thus, we could see some
upward revisions to the August employment numbers in the September and October employment reports."
Key Quotes
"The downward revisions may not reflect any fundamental weakness in the underlying trend, but rather, it might be capturing spurious volatility caused by seasonality issues."
"For example, it is quite difficult to seasonally adjust fluctuations in employment at automobile and parts manufacturers as most auto and auto-related companies shutdown production in July to retool and perform maintenance for the new model year. Moreover, the decline in federal workers could have been related to layoffs associated with sequestration."
"The standard deviation of monthly changes in S&L governments’ educational workers by month, tends to be most volatile in July, indicating that there may be some timing issues around the end of school year and the beginning of summer break-"
"Moreover, while the August nonfarm payrolls showed a smaller-than-expected increase, historically, August (and to a
lesser degree, July) numbers tend to be revised higher in the second and third estimates. Thus, we could see some
upward revisions to the August employment numbers in the September and October employment reports."