Karim writes:

Pretty bad payroll number that is likely to be enough to swing the Fed into action-at least Operation Twist, if not QE3

  • Payrolls unch for August, though Verizon strike impact was 45k
  • Net revisions -58k
  • Unemployment rate unch at 9.1% on account of 331k gain in household survey (prior 2mths total -483k) and 366k gain in labor force
  • Average hourly earnings -0.1% (0.5% prior mth)
  • Index of aggregate hours -0.2%
  • Manufacturing -3k from +36k
  • Retail -8k from +26k
  • Median duration of unemployment 21.8 weeks from 21.2
  • U6 measure 16.2% from 16.1%
  • Diffusion index 52.2 from 57.7

ISM yesterday showed production below 50, with other components holding up better. Anecdotes also show mixed results.
Possible that August was a temporary downturn, but Fed unlikely to take a chance on that and sit idle.

“Earlier chemical price increases are beginning to soften.” (Chemical Products)

“Business is soft, confidence is down, and we are cutting inventory and expenses.” (Machinery)

“Exports continue to be strong — domestic weak.” (Computer & Electronic Products)

“Domestic sales are showing small improvements. International sales are showing larger improvements.” (Fabricated Metal Products)

“Demand remains constant and strong.” (Paper Products)

“Current headwinds in the national and international economic environment have increased uncertainty, and are affecting our customers’ willingness to commit to high-dollar equipment purchases.” (Transportation Equipment)

“We continue to post solid numbers, but the situation seems tenuous.” (Plastics & Rubber Products)

“Automotive business (represents 52 percent of our sales portfolio) continues to be strong. Core business has pulled back slightly.” (Apparel, Leather & Allied Products)

“Sales continue to be sluggish.” (Furniture & Related Products)