The ranges of estimates are important in terms of market reaction because when the actual data deviates from the expectations, it creates a surprise effect. Another important input in market’s reaction is the distribution of forecasts.
In fact, although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range, so even if the data comes out inside the range of estimates but on the lower bound of the range, it can still create a surprise effect.
Non-Farm Payrolls
- -25K to 125K range of estimates
- 50K-75K range most clustered
- 60K consensus
Unemployment Rate
- 4.5% (26%)
- 4.4% (67%) – consensus
- 4.3% (7%)
Average Hourly Earnings Y/Y
- 3.8% (39%) – consensus
- 3.7% (39%) – consensus
- 3.6% (18%)
- 3.5% (4%)
Average Hourly Earnings M/M
- 0.4% (26%)
- 0.3% (63%) – consensus
- 0.2% (9%)
- 0.1% (2%)
Today is Good Friday and most markets are closed, so I wouldn’t expect much reaction from the market unless we get big deviations. Good data is still mostly ignored because the US-Iran conflict is expected to weigh on economic activity the longer it drags on. On the other hand, weak data, especially on the labour market side, could increase growth worries and exacerbate the negative sentiment.
