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By Bloomberg View

Over the years, I have spilled far too many pixels on how overhyped the monthly nonfarm payroll report is. What matters isn't any single month, given how noisy and subject to future revisions the provisional release actually is. The recency effect makes you place a greater emphasis on what just occurred in a data series, a sign of the evolutionary leftover code hanging around your wetware.

Someone correctly guesses the number each month, but it seems to be fairly random as to which economist tossed the lucky dart. Instead of playing this game, let's look at the trend within the context of the broader economic environment. As I have noted before, this is a post-credit crisis recovery. As such, this cycle should be weaker than the typical postwar recession cycle: low growth, slower job creation, weak wage pressure. And so it has been.

Where that picture got confusing was in the first quarter. Gross domestic product contracted at an annualized rate of 0.7 percent; job gains also markedly slowed. A Bloomberg report noted that monthly job gains have slowed this year, averaging 193,750 compared with almost 260,000 last year. Was that first- quarter an aberration, or is the economy beginning to decelerate?

If you want to make excuses for the weak GDP and jobs performance, you have your choice of reasons: The weather across much of the country was awful, hurting retail sales and manufacturing, and a port strike depressed imports. The strong dollar is a drag on U.S. manufacturers as well. Europe and Greece remain a concern; China’s economy has slowed for three years and government efforts there to stimulate growth seem to have only created a huge stock market bubble.

At 223,000 new jobs, the April payrolls report was closer to the earlier trend than the first quarter. Bloomberg's average forecast of economists anticipates a May payroll gain of 226,000, with no change to the 5.4 percent unemployment rate. If we hit that forecast, it would be mildly encouraging. The bottom line is the economy stumbled in the first quarter and we don't yet know if it was a one-off or an early warning sign that things are about to start getting worse. Today is only one in a long line of data points that might provide a bit of insight.

Today, however, you are required to engage in some second- level thinking. A strong payrolls report is likely to keep the Federal Reserve on target for raising interest rates, beginning with an increase in September. (The latest ADP report at least implies that a decent report is possible). Second-level thinking requires not only that must you anticipate what the Fed will or will not do in response, but you also have to anticipate what the crowd of traders will do as they engage in their own second-level thinking.