March 7, 2012

Three Reasons To Expect Good News From Friday's Jobs Report

Bruce Yandle

Distinguished Adjunct Fellow
Summary

Economist Bruce Yandle says the prospects for Friday's jobs report are pretty bright due to three indicators: ISM numbers, industrial production numbers, and the upward revision of fourth-quarter GDP.

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Economist Bruce Yandle says the prospects for Friday's jobs report are pretty bright due to three indicators: ISM numbers, industrial production numbers, and the upward revision of fourth-quarter GDP.

"I think we'll see job growth of 200,000 or more. The economy is in a growth phase," said Yandle. "Employment growth may be down slightly in the manufacturing sector, but the services sector, which makes up 85-90% of the economy, is showing some strength." 

"The Institute for Supply Management indexes for the two sectors are above 50, which means growth," he said.

"The other two big factors are the fourth-quarter GDP revision from 2.8% to 3% growth and the industrial production numbers that cover mining, manufacturing and electric utilities," said Yandle. "January Industrial Production was flat overall but up for manufacturing.  And the December numbers were revised up.  The IP number is one of the closest monthly proxies we have for how the economy is doing as whole."