3 numbers to watch today: NFP, ISM Non-Manuf, factory orders

It is that time of the month again - time for arguably the most followed data release, namely the US Employment report. Despite its significance we managed to find an a few more numbers also worth watching today.

• Nonfarm Payrolls seen adding 140,000 in January (13:30 GMT): Last month's impressive December report from the US labour market helped spark a more bullish stance among analysts towards the US economy. And while we have long maintained that the US would be in a muddle through scenario and not an outright recession (e.g. here or here) the recent change in sentiment towards the labour market and overall economy as well - consensus forecast for 2012 GDP growth has risen 0.2 percentage points to 2.3 percent in just one month - on the other hand also appears to us to be too radical. The December report saw 200,000 jobs added (payrolls), 212,000 of which were private - meaning the public sector continues to lay off workers on net, though the number of layoffs is falling. Consensus expects 140,000 added jobs and for the unemployment rate is expected to remain unchanged at 8.5 percent (more on the Employment report later today in a separate post).
• ISM Non-manufacturing to show expansion (15:00): The large US service sector (some 90 percent of the economy) is expected to show further gains to January and what is more, it is expected to accelerate by consensus to 53.2 from 53. New orders in December support this view rising to 53.2 while inventories declined to 48.5 setting the sector up for restocking and thus more activity in the coming months. A reading of 53.2 in the ISM Non-manufacturing Index corresponds to GDP growth (qoq, ann.) of roughly 2 percent illustrating our point that this is still a 'muddle trough' environment; not one of rapid growth.
• US Factory Orders to rise robustly (15:00): Durable Goods Orders, which accounts for just about half of all factory orders, rose 3 percent in December and hence it is no surprise that overall factory orders are also expected to rise at a solid pace. Consensus looks for 1.5 percent month-on-month, down from 1.8 percent in November. The 1.5 percent forecast assumes very little growth in nondurable goods orders and thus there is a potential upside surprise awaiting in today's report (note: durable goods orders are often revised as part of today's report on factory orders).

In addition to the three numbers above there is also the case of Greece, will it or won't it complete the Private Sector Investment (PSI) talks. The end date has been postponed several times, but Josef Ackermann, CEO of Deutsche Bank, commented recently that a deal was likely "in the coming weeks, maybe days". We shall see. What we do know is that without a PSI agreement come March Greece will be unable to roll its debt.

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