Wall Street is furious! After waiting for half a day for the non-farm payroll revision, someone made a phone call and got it in advance
The delayed release of revised US non-farm payroll data has caused market turmoil, with at least three banks obtaining the data in advance via phone calls. The data indicates that non-farm employment may be revised down by 818,000, marking the largest decline since 2009. This information supports market expectations of a rate cut by the Federal Reserve. The delay by the Bureau of Labor Statistics and the prioritized access to data by some companies have angered Wall Street, once again raising doubts about the credibility of the statistics bureau
The revised results of the U.S. non-farm payroll data released on Wednesday evening have stirred the market's nerves, as the data is crucial for confirming the Fed's interest rate cut prospects. However, the data was ultimately released half an hour later than scheduled. While other companies on Wall Street anxiously awaited the government's delayed release, the market was shocked, and the trading floor was in chaos, but at least three banks successfully obtained the key employment data.
The U.S. Bureau of Labor Statistics failed to release the revised monthly employment data correction results at 10 a.m. Eastern Time on Wednesday. Mizuho Financial Group and BNP Paribas called the department and directly obtained the data. According to sources, Nomura Holdings' economic research team also successfully obtained the data using this method.
As the news spread across Wall Street that the Bureau of Labor Statistics had started releasing these data by phone, anger quickly escalated. Subsequently, other companies and media outlets, including Bloomberg News, scrambled to get hold of this data, leading to chaos.
The data was finally released around 10:30 a.m. Eastern Time on Wednesday (around 10:30 p.m. Beijing Time on Wednesday). The data showed that in the 12 months ending in March, non-farm employment may be revised down by 818,000, the largest decrease in employment since 2009. As the report provided support for speculation that the Fed will begin cutting interest rates next month, the U.S. stock market initially surged, and U.S. bonds rose.
Nancy Tengler, CEO of Laffer Tengler Investments, said, "I'm not surprised people are feeling uneasy." "The whole thing is full of incompetence."
The data released by the Labor Department is crucial for traders trying to assess inflation and economic trends, and this delay in data and subsequent piecemeal disclosure is the latest in a series of embarrassing mistakes.
In May of this year, the U.S. Bureau of Labor Statistics inadvertently released Consumer Price Index data on its website about 30 minutes ahead of the official release time. A month before that, there were reports that an economist at the Bureau had repeatedly answered inquiries from Wall Street giants such as JPMorgan Chase and BlackRock about details of inflation index-related data, raising questions about the Bureau's practices.
A Bureau spokesperson said in an email to Bloomberg that the agency had reported the incident to the Labor Department's Inspector General's Office. "The integrity of data release is the Bureau of Labor Statistics' top priority, and we are closely reviewing our procedures to ensure that this does not happen again."
A Nomura spokesperson declined to comment.
Federal government economic data reports were once strictly controlled and prohibited from being released to news organizations. However, this practice was abandoned during the COVID-19 pandemic, with government departments instead releasing data to everyone on the internet at once. Officials said this method would better protect the security of market flow information.
After the July employment report from the Labor Department showed unexpectedly sharp slowdown in job growth, this Wednesday's revised data became even more important. This prompted Wall Street traders to increase their bets on interest rate cuts - if the latest data shows unexpectedly strong job market performance, all these bets could be overturned Yelena Shulyatyeva, senior economist at BNP Paribas in the United States, said that when the numbers were not released on time, she kept refreshing the webpage, waiting for the data. Then, "We made several public phone calls, and they gave us the data," she said.
Steven Ricchiuto, chief U.S. economist at Mizuho Bank, also took the same approach. He said, "After knowing that the data was delayed, we had to call to inquire."
After the data was publicly released, trading volume surged. During the period from 10:30 to 10:35 (the time frame for the final release of the latest data), about 20,000 S&P 500 index futures contracts changed hands, an increase of 58% compared to the previous 5 minutes. The S&P 500 index fluctuated initially and then declined, while bonds continued to extend gains.
Troy Ludtka, senior U.S. economist at SMBC Nikko Securities America, said, "I'm not just a little annoyed," he was also one of those waiting for the data to be publicly released.
"To put it in the most generous terms, government agencies absolutely cannot selectively release key market-affecting information to some brokers and dealers first by phone, leaving other brokers and dealers in the dark. This goes against the concept of a balanced market built on the principles of fairness and easy access to information."