Important!!! The first post is from yesterday, with the Citi chart, the second is from1/5, today....it's a miracle I tell you!!!

The Citi Economic Surprise indices have been useful indicators for finding short-term turning points in risk assets for many years. While not perfect, the mean-reverting nature is very instructive as to economist over- or under-optimism through the cycle. A recent SocGen strategy report noted that since the US rating downgrade, the majority of US macro data have beaten consensus - driving the surprise index up to cycle highs (from dramatically bad cycle lows). It appears that the US economic surprise indicator has peaked again and economists are currently upgrading their forecasts. We noted earlier, that markets are getting very sensitive to misses and this turn in 'economic data relative to over-optimistic forecasts' performance creates significant room for disappointment and implicitly, equity underperformance.

Employment comes in 8 standard deviations above consensus !!!!

The US economic "indicators" have once again entered the magic unicorn-cum-Department of Truth zone as if to prove to China that when it comes to data fudging the US really can be unparalleled. The just released December ADP private payrolls jobs, which has been completely uncorrelated to the NFP for the past several years (R squared of 0.003), came at a ridiculous 325,000 jobs on consensus of 177,000 private jobs. As a reminder this is a carbon copy replica of what happened in December 2010 when ADP soared and the NFP disappointed materially. But all is fair in love and robotic kneejerk reaction stimulation: ES +5 points on this latest ridiculous datapoint. Oh, and proving the "validity" of the data is that the number was about 8 standard deviations above consensus - aka statistical noise.

Here is how the ADP number compares to consensus.

And the recent correlation between ADP and BLS, courtesy of Andrew Yorks:

The propaganda narative itself:

ADP today reported that employment in the U.S. nonfarm private business sector increased by 325,000 from November to December on a seasonally adjusted basis. The estimated advance in employment from October to November was revised down slightly to 204,000 from the initially reported 206,000.

The increase in December was the largest monthly gain since last December 2010 and nearly twice the average monthly gain since May when employment decelerated sharply. Employment in the private, service-providing sector rose 273,000 in December, which is up from an increase of 176,000 in November. Employment in the private, goods-producing sector increased 52,000 in December, while manufacturing employment increased 22,000.

Employment on large payrolls—those with 500 or more workers—increased 37,000, and employment on medium payrolls—those with 50 to 499 workers—rose 140,000 in December.

Employment on small payrolls—those with up to 49 workers—rose 148,000 that same period, up from the 109,000 jobs created among small businesses last month. Of the 148,000 jobs created by small businesses, 18,000 jobs were created by the goods-producing sector and 130,000 jobs were created by the service-producing sector.

Employment in the construction industry increased 26,000 this month, which is up from an increase of 17,000 in November. Employment in the financial services sector declined 1,000 in December.