Unemployment Friday

Is poised to be more entertaining than usual, and I don't mean that in a good way. Apparently, the consensus expects payrolls to rise by 100,000. Now, this is not an outlandish possibility, given that unemployment claims have been pretty steady.

Nonetheless, as I argued last month, there's something very, very fishy about the employment numbers. Sooner or later they'll catch up to a rather unpleasant reality. Will it be this month? I don't know, but my hunch (yes, hunch) is that the payroll number will come in flat to slightly negative, like September. The carnage will probably start this quarter.

It'll be interesting to see how it plays out with long term rates and stocks. A flattish figure probably won't cause stocks or rates to fall much, given that most investors know that the balance of risks is tilted to the negative side.