This Friday morning at 8:30am/et, the global financial markets will freeze for just a moment in order to discern and calibrate the latest employment figures from August. The normal usage of the terms "good" and "bad" will be briefly suspended, at least in terms of market reaction.
That's because even if economists get it dead-right, job creation will have dipped 25% from where it was in July, to about 125,000 from 163,000. To suggest that is anything but bad would be absurd, and even more so if the number comes in less than expected.
Even if job growth inexplicably spikes for some reason, most pundits believe it's still too late to derail the Federal Reserve's plans for QE3 next week.
"Weekly (unemployment) claims have been decent enough, but not good enough to boost employment gains beyond the 200-250k that I think we'd need to see on a sustainable basis to keep the Fed out of the game, and to materially shift the rate of unemployment through 8%," says Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in the attached clip. "Right now we're simply treading water."
Not only does he need to see a "string of three-months'' of dramatically improved results to believe that a real trend change is in the works given the "one-off blips" and data revisions we constantly get, he also wants to see some concurrent improvement in manufacturing too.
"It's only 12% of the overall economy but that would give me some confidence that things around the world are beginning to pick up, or at the very least, that manufacturers see a glimmer of hope on the horizon," he says.
In fact, so baked-in is the next round of easing (and therefore all but immune to data) that I fall just short of calling Friday's number meaningless. Of course jobs data always matters, but to spend time trying to figure whether good is good or if it's actually bad, is a waste of time.
In Wilkinson's view, "the evidence is just not there" to stop him - or the Fed - from calling for more stimulus to boost an economy that is stalling and asset prices too.