Payroll Employment Time
This month’s payroll employment report has a unique feature: It will be released on a day when the stock market is closed.
This raises a number of questions about how traders will set up in advance of the report, and how they will react next Monday.
As usual, we invite readers to try their hand at the Payroll Employment Game. This report probably has the greatest divergence between the perceived importance and the general understanding of the information.
The site shows a lot of information on how the number is generated and some great charts on relevant predictive variables.
We have a very nice three-variable predictive model, described last month, but the forecast is for the ultimate job gain in the data series. This is not known for a year or so, after various revisions. By playing the game, one can get a sense of how much the variance in the report might be, even when one "knows" the true answer.
This may be the best tool available to traders for checking their own thinking.
We’ll post our own forecast on Thursday.