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Don’t freak about a bad jobs number — The October jobs report out at 8:30 a.m. is not likely to be very good, in part due to impact from the GM strike. Consensus is for a gain of 90K but the number could be even lower. GM could shave 50K off the headline, though Census hires could add some back. It’s gonna be noisy and possibly a throw away.
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Moody’s Mark Zandi emails: “Employment will increase by only 50,000 jobs. Even abstracting from the fallout from the GM strike, employment will increase by only 110,000.
“Underlying job growth … has been cut in half over the past year. If job growth slows any further, unemployment will rise. It is already rising in some key swing states such as PA, MI, WI, OH and IA. The biggest swing in job growth has been in manufacturing, which is now shedding jobs.”
Probably more important tomorrow — The jobs report gets most of the glory but Friday also brings the ISM manufacturing reading, a critical number given recent trade-war related weakness.
Leuthold’s Jim Paulsen: “At the epicenter of recent recession fears has been an ongoing manufacturing contraction, and investor anxieties are likely to persist until this sector shows signs of revival. … [T]here are some hopeful signs the U.S. manufacturing sector may be nearing a bottom”
Expectations are for tick up to 49 — still contraction territory but barely – from 47.8. A number over 50 would be very good news for the