Strong Manufacturing Sector Growth Pushing NFP Expectation Higher

The economy may have added as many as 200,000 jobs in July against the backdrop of a clear pickup in manufacturing activity and fewer layoffs.

The Wall Street consensus is for 184,000 jobs, off from the 195,000 nonfarm payrolls added in June, and the unemployment rate is expected to drop by 0.1 percent, to 7.5 percent, according to Thomson Reuters. The six months average for nonfarm payrolls is about 205,000.

“It looks as if tomorrow’s nonfarm payroll report, we have to skew it to be higher than the current consensus of about 200,000,” said David Ader, CRT Capital chief Treasury strategist. Whisper numbers in the bond market were 210,000 and higher.

A string of better data sent stocks rallying and bond yields higher Thursday, as investors pared back their Treasury holdings in anticipation that the July employment report could also be better than expected.

Stocks soared to new highs, with the S&P 500 rising above 1,700 for the first time to close 21 points higher, at 1,706. The Dow jumped 126 points, to a record 15,626. Meanwhile, the 10-year yield moved sharply higher, from 2.6 percent in the morning into a range that could start to make stock traders nervous. The 10-year yield was at 2.72 percent in afternoon trading.

CNBC

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