Jobs Report a Mixed Bag; New Job Growth Just 80K But Unemployment Rate Dips
November 4, 2011
The Labor Department reported that Nonfarm Payrolls, which is one of the most closely followed gauges regarding the state of the economy at the present time, grew by 80,000 in the month of October.
The increase of 80K jobs however was below the consensus estimates for an increase of 93,000 as well as September’s upwardly revised total of 157K.
The good news in the report was that September and August totals were revised higher by a total of 102K jobs.
The private sector (aka the household survey) showed gains of 104K jobs, which was just below the estimates for a gain of 120,000 jobs.
The nation’s Unemployment Rate was a bit of a surprise and fell to 9.0%, which was surprisingly better than the expectations for an unchanged reading of 9.1%. This number continues to raise eyebrows as the result flies in the face of other monthly employment statistics and is seen to be affected by seasonal factors and the complex formulas.
Next up, average hourly earnings increased by +0.2% on a month-over-month basis while the average number of weekly hours worked rose to 34.3.
Breaking the report down further, the number of government jobs reportedly fell by 24,000, with the lion’s share of the decline coming from the state and local government arena.
In sum, this report was largely in line with expectations and supports the Fed’s view that job growth in the U.S. remains painfully slow. Many analysts believe that the lack of job growth will be used by the FOMC to justify further easing measures in the coming months.
However, the revisions to August and September can be viewed as an incremental positive from a big picture standpoint.
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