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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101 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
d.barack

See Ya l8tr Darren. Tell you sister congrats on the new welfare child.

June 30 2014 at 7:40 PM Report abuse -3 rate up rate down Reply
d.barack

Hey Darren give up like Obama told you to.

June 30 2014 at 7:39 PM Report abuse -2 rate up rate down Reply
teabuster2

d.barack

Hey, how did you and your sister's kid turn out ?
==============================================
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
1 reply to teabuster2's comment
d.barack

Don't steal my material Darren, you welfare rats are always sponging.

June 30 2014 at 7:38 PM Report abuse -2 rate up rate down Reply
2 replies to d.barack's comment
teabuster2

Steal your material?????????? You are sick in the skull.

June 30 2014 at 7:43 PM Report abuse +1 rate up rate down
d.barack

Oh yeah, quit doing the Wild Thang with your sister, America doesn't need anymore welfare rats.

June 30 2014 at 8:05 PM Report abuse -3 rate up rate down
d.barack

Jeopardy music playing for darren's responses.

June 30 2014 at 7:35 PM Report abuse -3 rate up rate down Reply
d.barack

Darren Barthold is the Underwood Indiana's poster child for the mentally challenged.
You still live at your mom's house on Brownstown rd . ?

June 30 2014 at 7:34 PM Report abuse -3 rate up rate down Reply
d.barack

Hey Darren, aren't you late for your IED making class ?

June 30 2014 at 7:24 PM Report abuse -3 rate up rate down Reply
2 replies to d.barack's comment
d.barack

If you want to do some volunteer work, your messiah is about to make all illegals American citizens. Jump on it homey.

June 30 2014 at 7:27 PM Report abuse -2 rate up rate down Reply
teabuster2

I would urge to stay away from crude explosives, you might blow yourself up being the dummy that you are.

June 30 2014 at 7:27 PM Report abuse -1 rate up rate down Reply
4 replies to teabuster2's comment
teabuster2

d.barack

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

June 30 2014 at 7:21 PM Report abuse -1 rate up rate down Reply
1 reply to teabuster2's comment
d.barack

Timothy Leary is spaced out too ~ !

June 30 2014 at 7:22 PM Report abuse -2 rate up rate down Reply
d.barack

Darren is mad now, YIKES !

June 30 2014 at 6:50 PM Report abuse -3 rate up rate down Reply
1 reply to d.barack's comment
teabuster2

Not working

June 30 2014 at 6:53 PM Report abuse -1 rate up rate down Reply
14 replies to teabuster2's comment
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
2 replies to teabuster2's comment
d.barack

Your response to "trewliberal" suggests that you are in fact "toodumb2befree"

June 30 2014 at 6:53 PM Report abuse -1 rate up rate down Reply
2 replies to d.barack's comment
teabuster2

You're just plain dumb, and that's all there is to it.

June 30 2014 at 6:56 PM Report abuse rate up rate down
d.barack

You just can't accept the fact that I bust your multiple screen names ......;;;;;(((((

June 30 2014 at 7:12 PM Report abuse -2 rate up rate down
d.barack

Tell all the posters here why you have multiple screen names to spew your Obama Zombie BS ?

June 30 2014 at 6:55 PM Report abuse -2 rate up rate down Reply
5 replies to d.barack's comment