The Mystery Of Friday’s “Somehow Disappointing” Jobs Number

A long time ago, in another life, I learned by necessity how to smell a setup.

And I gotta tell you, it feels like we’re being set up.

Read this from a strategist at Market Securities (via Bloomberg):

• Jan. payroll data is ‘somehow disappointing’
• Jan. payrolls report released Friday will create uncertainty among Fed policy makers about whether wage pressures are materializing and full employment is close
• Data could also damp expectations for tighter monetary policy in line with three rate hikes this year
• Slowing wage growth suggests both personal income and spending were weak
• Underemployment results were “disappointing” and number of people working part-time for economic reasons increased by 242k

I mean look, I get it. And I’m sure you do too. Hourly earnings missed and it looks like the 0.1% m/m growth was the lowest since last August. If you’re so inclined you can read into that something about consumer spending and consumer spending is three fourths of the economy. And on, and on. It’s not rocket science.

“Average hourly earnings increased by 0.1% (mom) in January, less than expected, and earlier months were revised down,” Goldman wrote, following the report, adding that they “had anticipated a boost to AHE from minimum wage hikes at the start of the year, but the report suggests these effects were relatively small.”

Supposedly the Fed is going to look at that and decide “well, maybe we shouldn’t be hiking three times this year after all.” Or at least that’s what markets are telling us:

The odds of a March hike fell to 26%, from 32% earlier this week.

So suddenly these f*ckers are data dependent again?

I doubt it.

This isn’t a conspiracy theory. That is, I’m not suggesting that the numbers are wrong. But rather I would question how the numbers are read and interpreted.

If the Fed keys on the AHE miss as the market thinks they will (completely ignoring the headline beat, the blockbuster ADP print from earlier this week, a falling dollar, near record high stocks, a credit market that screams “I’m rich and overleveraged!”) then I think it’s entirely fair to suggest there may just be some pressure coming from oh, I don’t know, the White House maybe, to find any excuse possible not to do anything that’s going to increase yield differentials and thereby give the dollar an excuse to rise. 

So if the numbers are indeed “somehow disappointing,” that’s really convenient because paradoxically, Trump needed them to be…