The Bureau of Labor Statistics said that non-farm payrolls grew by 94,000 in November, slightly above the 85,000 economists had forecasted but possibly a bit below what investors were really looking for given the strong ADP number on Wednesday.
Going in, given the rally leading into the report, part of which was on the strength of the ADP number, I think we needed a really big number, like 180,000+ to move the market higher from here. Anything really low, 50,000 or less, might have raised the possibility of a 50 point cut next Tuesday.
94,000 is pretty much a middling number. It’s probably a little less than the bulls were hoping for and not weak enough for a 50 basis point cut on Tuesday. That said, it’s not a terrible number either as it supports the idea that the economy is muddling along.
It’s also worth pointing out that the number the BLS gives us every month tends to get revised going forward, sometimes wildly, and is also based on assumptions about the economy (see, for example, “Survey To Trust: Is Household Poll The Real Deal?”, Justin Lahart, The Wall Street Journal, Friday December 7).
Stocks are slightly down an hour and a half in (Dow +4, S&P -2, Nasdaq -8).
A consolidation day where markets are slightly down but mostly hold their gains from the last 8 days would be fine with the bulls. Bears are probably hoping for a bigger selloff.