Market Analysis

Bonds are slightly positive this morning despite a better than expected the Initial Jobless Claims report for the week ended 2/27/10 (claims were down 29,000 vs expectations for a 20,000 decline.  Continuing Claims for the week ended 2/20/10 were also better than expected (down to 4.5 million vs expectations of a 4.6 million figure).  Due to the influence of weather shutdowns in the Northeast last month, analysts have revised upward their expectations for tomorrow's February Non Farm Payroll Report from the 20,000-50,000 job loss level to the 75,000 job loss level.  I read an article earlier this week, but can not longer find the reference to reverify the information, which said that the portion of the monthly Jobs report which tallies job losses doesn't survey employers for actual hirings and firings, but is just a telephone survey which asks them how many employees are at work that day.  According to that article, employees not at work due to weather conditions would be considered a job loss in the Non Farm report.  I have not been able to reverify this information from another source but if it is correct it would provide support for why analysts are beginning to say that tomorrow's report may be written off in terms of accuracy due to the weather issues.  One note, however, is that if, even with the weather issues built into the report, the report shows fewer job losses than expected, it would be expected that such a report would exert upward pressure on mortgage rates.

In other economic news, 4th Qtr 2009 Productivity was revised upward to 6.9% improvement vs prior estimates of 6.2% and market expectations for a revision to 6.3%.  4th Qtr 2009 Unit Labor costs were revised to a 5.9% reduction which was greater than the -4.4% initial report and market expectations for a revision to -4.5%.  January 2010 Factory Orders were up 1.7% vs expectations for a 1.8% increase.