Economists are expecting another dismal U.S. non-farm payroll number this Friday, with new jobs likely up only about 110,000 in September.
But the number of new positions estimated by the U.S. Bureau of Labor Statistics may be seriously understating what’s actually happening on the employment front.
That’s the view of forecasting outfit TrimTabs Investment Research. The firm says the U.S. economy probably added a healthy 210,000 jobs in September, which would make it the strongest growth since March 2011.
Actual August payrolls reported by the U.S. government were up only 96,000, so the TrimTabs estimate, should it actually come to pass, will be a big surprise for the market.
Stocks would likely receive a boost from a stronger number, but bonds would do poorly.
TrimTabs says it believes the economy is picking up a bit of momentum, leading to job gains in interest-sensitive sectors.“We believe artificially low interest rates are boosting demand for housing, mortgage refinancing, and vehicles,” it says.
TrimTabs’s employment forecast is based on the amount of daily income tax paid to the U.S. Treasury from all salaried employees, according to the firm, which says this gives a more accurate, real time view of job trends than the government’s estimate. The bureau number is subject to frequent revisions and seasonal adjustments.
TrimTabs says that over time its results “are historically more accurate than the initial BLS estimates.”
Earlier today, payroll processing company ADP said private payrolls expanded by 162,000 in September, so TrimTabs number suggests quite a bit more economic strength than is commonly believed.
Unfortunately, TrimTabs says it doesn’t believe the pick up in jobs is sustainable long-term, in part due to extra costs related to U.S. health care reform that are scheduled to come into effect on Jan. 1.