Why Investors Are Anxious About This Week's Job Report

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Unemployment Benefits
Mike Groll/APJob seekers at a recent job fair in Hudson, N.Y.
By Alex Rosenberg | @CNBCAlex

Don't let the short week fool you. There's big news ahead for the American economy.

With Independence Day falling on July Fourth this year, which happens to be a Friday, the June employment report will be released one day earlier than normal. And market participants (at least the ones who haven't already headed to the Hamptons) will be watching with great interest, because a supremely weak revised first quarter GDP number leaves open some tricky questions about the state of the U.S. economy.

"This is a huge deal this week in light of the fact that we got such awful GDP numbers last week," said trader Jim Iuorio of TJM Institutional Services. "People have got to get some clarity from these numbers."

On Wednesday, the third estimate for GDP growth in the first quarter was revised down to a 2.9 percent decline, significantly worse than the prior estimate of a 1 percent decline. And while the weather and other somewhat random factors have been shouldered with the blame, the print is still seen as raising the stakes on Thursday.

"Even though the Q1 GDP figure is old news, the financial markets will need to see continued strength in the current quarter to become confident that last quarter's results were truly an aberration," wrote Deutsche Bank (DB) chief U.S. economist Joseph LaVorgna in a recent note. "In this regard, the June employment report ... takes on added significance."

To be sure, LaVorgna is indeed expecting the payrolls report to confirm that Q1 GDP ought to be more or less ignored. He predicts a 225,000 increase in non-farm payrolls, which is above the consensus.

"The Street is looking for stability here," said Michael Block, the chief strategist at Rhino Trading Partners, a New York-based broker-dealer and research provider. "The Street consensus looks very similar to what we saw in May. Expectations are very grounded. No one's really looking for anything to rock the boat here."

If the numbers miss on the downside, however, the ramifications could be serious, warns Chicago-based trader Jeff Kilburg.

"I think you need to be careful this week," he said. "This unnatural calm cannot last forever."


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37 Comments

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pj512

I still haven't found a job, after three years, so I certainly won't help your numbers.

June 30 2014 at 8:37 PM Report abuse rate up rate down Reply
1 reply to pj512's comment
Jay McKay

Try six years

July 01 2014 at 5:10 AM Report abuse rate up rate down Reply
teabuster2

d.barack

Hey, how did you and your sister's kid turn out ?
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If there's incest in your family, why tell the world?

June 30 2014 at 7:37 PM Report abuse -1 rate up rate down Reply
teabuster2

d.barack

So you're independently wealthy and you never started a business to employ your fellow man ? What a greedy bastard.
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The EBT card business is quite lucrative.

June 30 2014 at 7:21 PM Report abuse -1 rate up rate down Reply
teabuster2

trewliberal

toodumb2bfree it looks like you are still too dumb to be free.

Whoda thunk, right?
=====================================================
Your crude, childish, and repetitious insults, demonstrates just how dumb you are.

June 30 2014 at 6:47 PM Report abuse -2 rate up rate down Reply
Richard

Dismal picture here and that's why a substantial number of US citizens are looking at leaving this country and many of the wealthy already have. We have found ourselves in much the same pickle that some eastern and a lot of western Europeans did during the turn of the 20th century.

June 30 2014 at 5:07 PM Report abuse +1 rate up rate down Reply
toosmart4u

d.barack,,,sounds like you are still talking about the bush jr. administration, you hit the nail right on the head.

June 30 2014 at 2:55 PM Report abuse -2 rate up rate down Reply
2 replies to toosmart4u's comment
democrap2

No dunce, he's talking about the current AWOL Administraion.

June 30 2014 at 3:02 PM Report abuse +3 rate up rate down Reply
trewliberal

toodumb2bfree it looks like you are still too dumb to be free.

Whoda thunk, right?

June 30 2014 at 4:40 PM Report abuse +1 rate up rate down Reply
wwas3434

FROM WHERE I SIT I DO NOT SEE ANY IMPROVEMENT IN THE ECONOMY FORECLOSURES ARE STILL PREVELENT IN THE HOUSEING MARKET

June 30 2014 at 2:54 PM Report abuse +4 rate up rate down Reply
Iselin007

Some employers or their representatives just say no were not hiring right now but you can fill out the form on the computer in the lobby. After so many people fill out that form it just may get lost along the way.

June 30 2014 at 2:00 PM Report abuse rate up rate down Reply
1 reply to Iselin007's comment
trewliberal

So?

June 30 2014 at 2:47 PM Report abuse -1 rate up rate down Reply
Iselin007

d.barack
And your point is ?


Point is seekers are going to be counted vigoriously and accurately when an employer is apple picking a hand full or less out of 100's or thousands. Basically the employer isn't going spend anytime or money to count everyone.

June 30 2014 at 1:56 PM Report abuse rate up rate down Reply
Iselin007

Remember today job cuts are mostly permanent and most hiring is part time, temporary and seasonal. Too many people are older an competing for the same crap jobs with younger people.

People have to pick up after their dogs or other pets but they don't make a scooper for this crappy jobs market!

June 30 2014 at 1:18 PM Report abuse +4 rate up rate down Reply