Non-Farm Payrolls

Although this is a bit more of the reaction I was suspecting (at least at some point between today and Monday based on the 5-15 min 3C Index Futures), I'd still caution not to make too many assumptions regarding market action for the rest of the day, it's Friday, low liquidity, high emotions (which can be used either way) so we typically have the pin, but that pin over the last 6 months or so has been pretty darn close to Thursday's close (Wednesday this week) so a move down toward that area may not be too surprising NFP or not.

Here's the actual data for Non-Farm Payrolls from 8:30
Released On 7/5/2013 8:30:00 AM For Jun, 2013

	Prior	Consensus	Consensus Range	Actual
Nonfarm Payrolls - M/M change	175,000	161,000	145,000  to 200,000	195,000
Unemployment Rate - Level	7.6 %	7.5 %	7.4 % to 7.6 %	7.6 %
Average Hourly Earnings - M/M change	0.0 %	0.2 %	0.1 % to 0.3 %	0.4 %
Av Workweek - All Employees	34.5 hrs	34.5 hrs	34.4 hrs to 34.6 hrs	34.5 hrs
Private Payrolls - M/M change	178,000	175,000	150,000  to 200,000	202,000

As you can see, they came in at 195k, significantly above the 161k consensus, above the 175k prior and near the top of the 200k range. Furthermore, May's 175k print was revised higher to 195k.

The under-employment rate (U6 which is a lot closer to the way employment was gauged in the 1920's and I'm referring to the unemployment extreme during the depression of 25%) really popped from 13.8% to 14.3%. The headline employment rate is called U3, there are 6 different classifications.

I'm not going to cover the specifics, you can get those anywhere, but, I will say this... You may recall after the September 13th F_O_M_C QE3 announecement I noticed a more hawkish (at least strong hints) tone coming from the F_E_D ,like the question around 2:20 to Bernie about inflation and his answer about adjusting the size of assets that topped the market out that very minute afte having shot up after QE 3 was announced. The most significant development in my mind that showed the F_E_D's intention was to talk about and then change from a Calancar date guidance model which is very objective (QE will go on until XYZ date and rates wont move at least until XYZ date" to the much more subjective AND MUCH EASIER TO MANIPULATE, "ECONOMIC CONDITIONS", which is as subjective and easy to manipulate as it comes, this introduced a great deal of uncertainty in the market and this is why I beleive the rally at the start of the year was nothing but distribution, 3C shows it and market breadth shows it exceedingly clear.

In other words, the F_E_D found a face saving way they could basically do whatever they wanted to with guidance (we all know these reports and if you have doubts, look at the Economic Surprise Index over the last several years and specifically at the first quarter of the year when seasonal adjustments allow data manipulation very easily, then watch how the indicator drops from positive to negative). Once the F_E_D moved to change the yard stick after all these years, it became clear they were thinking about a different direction, the market doesn't like today's better than expected NFP as it makes September look much more likely as the "Taper-date".

We'll take a look at how this has changed the complexion of futures and the open shortly.