The Day Ahead: Weighing Traditional Importance of Jobs Report Against Sandy's Disruptions

The task of drawing conclusions about market fundamentals based on post-Hurricane Sandy economic data has been frustrating at times.  At best, the storm has complicated things by calling into question the "real-ness" of any given deviation from expectations.  In other words, when Jobless Claims were much higher than expected in the first report that followed the storm, how much of that weakness was attributable to the storm?  Was there organic weakness independent of the disruption?  Was there even a reliable way to filter this from that?  Or did it just make more sense to not be too reactionary about any piece of data that stood a chance to be clouded by Sandy's after-effects?

Maybe it's just me, but it seems like there's been some sort of tacit temptation to be too dismissive about unexpected results when they can be ascribed to Sandy.  "Somewhat dismissive" would be OK, but the current data can't be disregarded for this reason, and in all likelihood, it hasn't been.  Don't get me wrong... it has, in fact, been disregarded to some extent, but not because of Sandy!  Sandy has created an ideal level of "somewhat dismissive."  We've seen markets actually react to data that was affected by Sandy when that data deserved the reaction. 

But markets have set the bar quite high for market moving information due to a different perfect storm consisting primarily of Fiscal Cliff uncertainty, next week's FOMC Announcement, year-end tradeflow considerations, and European headlines.  There's some room in here for today's Jobs report as well.  It stands a good chance to have less than usual levels of impact on markets, but be aware that the potential is still there, ESPECIALLY if the report manages a better-than-expected headline.  The current consensus calls for 93k payrolls and 95k private payrolls, down from 171k and 184k respectively last month.