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Goldman Cuts January Payrolls Forecast From 250K to 210K

First it was the ADP private payrolls report which printed the lowest monthly number since September and the explicit statement that  "Businesses in the energy and supplying industries are already scaling back payrolls in reaction to the collapse in oil prices, while industries benefiting from the lower prices have been slower to increase their hiring." Then it was the (just as unreliable) Non-mfg ISM report which carried with it the weakest employment number since February 2014. Put all this together, and finally the crude capex collapse is starting to manifest itself in some unambiguously good, pardon, bad consequences implications for the economy, which will most likely become quite visible this Friday, when the January payrolls report hits. A report which Goldman just became 16% more bearish on when it cut its January payrolls forecast from 250K to 210K.

From Goldman:

The ISM nonmanufacturing index ticked up slightly to 56.7 in January (vs. consensus 56.4), from 56.5 in December. Components were mixed, as business activity rose (+2.9pt to 61.5), new orders edged up a bit (+0.3pt to 59.5), and employment worsened (-4.1pt to 51.6). New export orders—not a component of the headline index—declined one point to 52.5, consistent with the softening in export orders seen in the January ISM manufacturing survey. Prices paid declined, likely due to lower commodity prices (-4.3pt to 45.5). Commentary in the release remained broadly positive, except for the oil industry.

 

Mainly due to the weaker employment component of the ISM nonmanufacturing index, we reduced our forecast for January nonfarm payroll employment growth to 210k, from 250k previously.

Expect the rest of the sell-side penguins to scramble and do the same in the coming minutes.