FOMC – Dec 05 2014

 BarroMetrics Views: FOMC – Dec 05 2014

I am aware that I need to conclude “Trends” and “Unrealistic Expectations”. I’ll attend to both next week.

Today there is a more immediate concern. The FOMC numbers due out tonight. ShadowStats was particularly critical of the Oct numbers. After stating why he thought the numbers were distorted, John Williams went on to say…….

“Employment Should Fall Sharply and the Unemployment Rate Should Rise in November.  Reversing the swings seen in 2013, November 2014 likely will move sharply in the opposite direction from October, as the reporting and adjusting imbalances catch up.  Watch for an offsetting sharp headline decline in the November 2014 household-survey employment number, and an increase in the November headline unemployment rate”.

I don’t often disagree with John. But. on this occasion I do.

I developed a theory (and so far it has served me to good stead) that the ‘numbers’ nowadays  seem to serve a political need. This month Obama is in retreats on most fronts. Given this, my theory suggests that the offset suggested by John will not occur this month. More likely we’ll see a number close to consensus, or at the higher end of consensus range.

The consensus for the November numbers comes in at 230K with the range being 140K to 275K. I am suggesting we’ll see a number between 230K and 275K.

Such a number would keep the S&P upmove on track, and keep the USD steady.  A number above 275K will send the USD up, while a number below 200 is likely to send the USD down, given the sentiment currently in the market.