Remember your geometry corollaries?
“If A=B and B=C then A must equal C”
So in looking at the markets reaction to the March jobs report we should conclude:
The numbers were bad and the market sold off (A) because it missed economists expectations (B); A=B
The economists expectations (B) are always correct (C); B=C
Therefore numbers were bad and the market’s reaction (A) was correct because economists expectations are always right (C); A=C
Am I the only one who sees the flaw? We all know economists predictions are only slightly better than those of the bearded lady who reads palms for $5 in some rat infested shit hole in Atlantic City. Yet, we see over and over people reacting, not to the actual number but to the degree it either falls short or surpasses what the palm readers in nice suits say.
There have been several pieces out that do a good job detailing how the March numbers were not “bad”. I had my take on them here.
In order to believe the “badness” of these numbers and accept the sell off ($SPY) as legitimate we also have to believe they won’t be revised. Because, well, if they are revised, then the number reported Friday is meaningless until we know the real number……so…..
We also have to believe that the one month dip in the progress in NFP is also the current NEW trend and not an anomaly or the natural ebb and flow of market data….
Let’s look a it visually….
Here is the total # of employed since March ’09
Here is how we got there….the monthly change in payrolls over the same timeframe
Hopefully that puts March’s numbers in better perspective cause that top chart is still going up….
