Nonfarm Payroll Reports Since the Start of 2008

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Economists are expecting a loss of 328,000 jobs in tomorrow's (Aug. 7) nonfarm payrolls report.  Traders definitely remember the horrific day we had on the last jobs report when the S&P 500 went down 2.91%.  That day, estimates were for a loss of 365,000 jobs, and the actual number came in much weaker at -467,000.  The market took a big hit that day because many traders were looking for a better than expected report since the prior month's jobs number came in much better than expected (-345k actual vs. -520k estimates).  Traders don't seem as optimistic about the July jobs number meeting or beating expectations as they did heading into last month's report, so hopefully this would temper the declines on another miss.  However, it seems that many are taking the view that the market will pull back regardless of the report since it has had such a strong run leading up to it.

As shown in the table below, the jobs number has now been reported as negative in every month going back to February 2008.  The peak looks to have been the March '09 number that saw 663,000 job losses (released on 4/3).  Interestingly, while last month the market declined on a weaker than expected report, the average change for the S&P 500 on "miss" days has been +0.35% since 2008.  The index has averaged a decline of 0.55% on "beat" days.  Go figure.


8/7/09  -247.0   -325.0    78.0     Stronger       ?

From http://bespokeinvest.typepad.com/