NFP Comes in at a Controversial Beat.

ES shows the controversy as it unfolded...

The 8:30 print which beat considerably, 200k vs. consensus of 155k sent ES popping 6 points, but then it slid back down to levels seen just before the release, why?

Morgan Stanley has been circulating a note, "Not so fast!"

Apparently the seasonal adjustment says Morgan Stanley, produced a +42k quirk that will be given back next NFP report in February.

"some of the strength in this report should be discounted because of an seasonal quirk in the courier category of payrolls (Fed-ex, UPS, etc). Jobs in this sector jumped 42,000 in December, repeating a pattern seen in 2009 and 2010 (see attached figure).  We should see a payback in next month's report."


His  note was accompanied by a chart showing the seasonal oddity, that seems to be what has caused the initial excitement to wane, that along with the fact that the BLS has revised many components again in this report including the unemployment rate, but revisions are almost guaranteed and they are never positive.