believe it or not, the morons at the fed could actually move quickly on a weak jobs number tomorrow. most labor market indicators suggest that the job situation continued to deteriorate in february. for example, the conference board's consumer confidence index for february fell to a roughly 5-year low.
importantly, the percentage of respondents in the conference-board survey that said jobs were hard-to-get increased sharply, a worrisome development given the strong historical correlation between this component and the us unemployment rate. also of concern: the percentage of respondents who said that there would be more jobs six months from fell to a 28-year low.
moreover, the number of people making jobless claims rose 160,000 when compared to previous months. and the employment component of the chicago purchasing managers' february purchasing managers index fell more in one month than any month since 1946.
looking ahead to friday's jobs report, it's hard to see how a stronger-than-expected reading would help improve the atmosphere. in fact, it's much easier to envision how payrolls might be much weaker than the consensus forecast for an increase of 25k.
recall that during the past two economic recessions, payroll decreases of 100k to 200k were the norm. if the report is weak enough, say, a loss of 100,000 jobs, then there will be plenty of chatter about the chances of an early fed rate cut. (on numerous occasions in the 1990's, the fed cut rates immediately upon the release of a weak jobs report).
a report that is substantially weak could elicit a strong reaction in financial markets. any capitulation in the markets could create good values in a number of industries and in the credit markets.