The Jobs Report Today Was Much Worse Than Expected -- Reading The Tea Leaves -- May 6, 2016; Off The Net For Awhile

Updates

May 7, 2016: I hate to pile on, but the news keeps getting worse. Actually the news is the same -- an incredibly awful jobs report -- but analysts and journalists keep writing about it, suggesting this story may have legs. So far, none of the stories talk about any possible linkage between hiring and ObamaCare in which it now appears premiums will rise significantly. The most recent story is from The Wall Street Journal, the day after: soft jobs market clouds outlook.  

Original Post

Generally when the weekly or monthly jobs report comes out, there is some initial reaction on early morning business shows but by 10:00 a.m. the news is generally over with regard to jobs.

However, now we have a headline story from Goldman Sachs saying they are "re-thinking the Fed" based on the jobs report today.

April was less than stellar for the US labor market.

Companies added just 160,000 nonfarm payrolls during the month, which was less than the 200,000 consensus estimate. Meanwhile, the unemployment rate was unchanged at 5.0%.

The economists at Goldman Sachs were particularly disappointed by the report.

The team, led by David Mericle, had forecast 240,000 new jobs, which they expected to support their call that the Federal Reserve would raise interest rates during their next Federal Open Market Committee (FOMC) meeting in June.

When there are follow-up stories to the jobs report coming later in the day and especially when they are stories like this, it speaks volumes.

Think about that: GS forecast 240,000 new jobs, well above the magic number of 200,000 which is needed to avoid talk of "economic stagnation."

A report of 220,000 would have been great (in retrospect), but it would have still fallen short of GS forecasts. In fact, looking back (two hours ago) GS might have been happy with any number above 200,00 -- even 202,000.

But 190,000. Nope. 180,000. Nope. 175,000. Nope.

160,000.

Something tells me "everyone" is re-checking the numbers and I wouldn't be a bit surprised to see some extraordinary reporting to yet come out to "explain" all this.

Short-term winner, politically: Trump.

Short-term losers, politically: incumbents; establishment candidates.