On April 5th, investors were jolted when the non-farm payrolls report came in at +88,000 – missing expectations by a mile. However, the day before on ritholtz.com, I wrote:
“If a weak number is reported, the odds favor it will likely be revised upward in the future.”
And what happened today?
Not only did the non-farm payrolls report show +165,000 jobs for April, beating expectations, but also +114,000 in revisions for February and March. The S&P 500 blasted to an all-time high.
So, I totally nailed it. How did I do that? Easy: tax collections don’t lie. Companies go to great lengths to avoid paying taxes, squirreling away their money in the Caymans, making employees “independent contractors”, floating bonds when they have billions in the bank, etc. So, when tax collections are strong, it’s pretty much guaranteed that lots of jobs are being created.
And if you subscribed to The Daily Jobs Update, you would know all about it.