During the past week the US has released one piece after another of negative economic data that points to the likelihood of a weaker than expected Non-Farm Payrolls number that is release tomorrow at 08.30 New York time or 13.30pm GMT.
Monday: Personal Spending up 0.4% compared to an expected 0.5% (previously 0.5%)
Tuesday: Consumer Confidence plunges to 52.9 versus analysts estimate of 62 (previous month 62.7)
Wednesday: ADP Employment Change was 13,000 versus an expected 61,000 (previously 57,000)
Thursday: Continuing Claims rose by 472,000 versus 451,000 that was expected (previously 457,300)
ISM (Institute for Supply Management) Index declined to 56.2 versus 59.0 (previously 59.7)
Pending Home Sales took a nose dive, plunging to -30% compared to a decline of -10.5% that was expected (previous month +6%)
Additionally during trading hours in New York on Thursday the US Dollar saw broad based declines against its major competitors the Yen, Pound Sterling & the Euro. This could be seen as investors pricing in a very negative jobs number since the Dollar is traditionally seen a safe haven play. However with weakness in US manufacturing as in ISM data indicates and a rapidly deteriorating US housing market the dollar is now been sold in part because of the underlying fundamentals of the US economy. If we do see a worse than expected jobs figure tomorrow it could set the tone for a heavy day of selling as investor already jittery after a flurry of bad economic data this week will ratchet up the rhetoric of a 'potential' double-dip recession. This was given more credence when economist at JPMorgan Michael Feroli cut his growth forecast for the third quarter to 3% from 4%.
The latest estimate for the Non-Farm Payroll figure tomorrow is a decline of 100,000 with the unemployment rate ticking up slightly by 0.1% to 9.8%. Crucially this months figures will not include census workers, which accounted for 411,000 of the 431,000 in the previous months report.