The revision that matters more than the headline

[Fairman]

The revision that matters more than the headline

Jobs reports come with a headline number and revisions to previous months. Sometimes the revisions are larger than the headline surprise. The first spike follows the top number, and the second move follows the correction as traders read the revisions.

Other details also shift the story: wage growth, participation rate, hours worked, and the breakdown between sectors. A strong headline paired with weak wages might leave the market confused.

For a scalper, that explains the common pattern of a spike in one direction, a sharp reversal within a minute or two, and a final direction that settles a few minutes later.

The practical point is that the first move says little about where price is going. It is a reaction to a single number, while the market is still processing the rest.

Writing down the headline and the revisions for each release, along with the price path over the following ten minutes, reveals which components the market actually cares about this month. That changes over time, and the focus can shift from jobs to wages to inflation.

One more habit: keep a one page cheat sheet for each major release listing the components that have mattered in recent months and which direction each pushes the pair. The sheet changes over time, and updating it forces a useful review.

Which part of the jobs report has driven the biggest moves lately?