Statistics are like the cereal aisle in the supermarket. No one needs that many and it really doesn’t matter which one you choose.
This week it is possible we will not hear from the Census Bureau on construction spending and factory orders or the Labor Department on non-farm payrolls, the unemployment rate, private payrolls and several other closely watched statistics.
Will it matter? Probably not.
Statistics are important to markets for two reasons. First they contain economic information that markets use to formulate a picture of the economy. Second they are keys that traders use to make bets about market reaction to economic news.
As economic indicators some statistics are definitely better than others but none is irreplaceable and no one release is overly important, it is the trend that matters.
Non-farm payrolls may be the best image of the U.S. labor market but tomorrow’s ADP National Employment Report is an adequate if temporary substitute. Factory orders may be more detailed than the purchasing managers’ index or Fed manufacturing surveys but they all cover the same economic territory. The general trend in the economy will not be different if ADP is used rather than non-farm or if factory orders gives way to Fed surveys.
As speculative markers, nothing currently beats an unexpected non-farm number and traders will miss the volatility this Friday at 8:30 am. But except for a potentially boring end of the week there will be no other effect from a forced holiday at Department of Labor.
And if, for some reason, non-farm payrolls never returned, traders would soon find some other number to place their bets on. Speculation is a function of markets not statistics.
Chief Market Strategist