Payrolls


Karim writes:

Headline near consensus and also very consistent with trend of recent months; but details on soft side

  • Headline payrolls -95k; private payrolls +64k; payrolls ex-census workers -20k
  • The 83k drop in state and local govt payrolls likely skewed by seasonals related to education (-50k jobs)
  • Avg weekly earnings unch and hours worked unch; so personal income will be soft in Sep (though it was strong in prior mths)
  • Unemployment rate 9.579% from 9.642%
  • Notable swings by sector: construction -52k; manufacturing -22k; leisure/hospitality +18k; Retail +8k
  • Median duration of unemployed up from 19.9 to 20.4; U6 measure up from 16.7% to 17.1%
  • Diffusion index drops from 54.1 to 49.8 (first month below 50 since January).

Data consistent with moderate growth which is not enough to materially lower unemployment rate and as such, further lowers the bar for more aggressive LSAPs in November.

Census jobs still being lost. State and local cuts will also probably continue.

Also, 65,000 private sector jobs is about 100,000 short of what I’d guess will be the norm with initial and continuing claims now drifting lower.

GDP growing faster than jobs indicates productivity still doing well, which is positive for profits.

Lower interest rates also continuing to support valuations.

Bullard on CNBC shows FOMC still not up to speed on monetary operations.

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