By now you’ve heard that it was a big disappointment, but let’s dig in a little deeper:
1. The headline number, obviously, is atrocious, coming in at just +39,000. Expectations from economists and analysts were for much higher, ranging from 145,000 to 168,000. The report also defies the momentum implied by this week’s ADP report and the initial weekly claims numbers for the last month.
2. The October payroll numbers were revised up from 151,000 to 172,000, and those for September from -41,000 to -24,000. So here’s what the previous four months look like after their later revisions, plus November:
July: -66,000
August: -1,000
September: -24,000
October: +172,000
November: +39,000
Keep in mind that the months through September required adjustments for the people who lost temporary jobs doing the census, so they were somewhat better than these numbers. Still, the October numbers look rather anomalous, and it’s difficult from these figures to see exactly which direction this is headed.
3. Looking at the household survey, the total number of employed people declined again, this time from 139,061,000 to 138,888. The employment-population ratio was 58.2 per cent. A year ago it was 58.8 per cent. To get a sense of how bad this number is in historical terms, look at the black line in this chart, just updated by Calculated Risk:
4. The private sector accounted for jobs growth of 50,000, with the government contributing a loss of 11,000. Within sectors, retail was responsible for the biggest net job loss, and manufacturing jobs also declined despite recent signs of strength in the sector. Healthcare and education jobs are still growing, as are jobs in temporary help services. For detail, click to enlarge the chart from the establishment survey:
5. The size of the labour force remained pretty much flat last month, with a participation rate holding at 64.5 per cent. Last year at this time, it was at 64.9 per cent. The long-term unemployed — those without a job for more than 26 weeks — stayed roughly the same at 6.3 million. For a sense of why this matters for the sustained health of the economy, check out this Thursday New York Times story:
New data from the Labor Department, provided to The New York Times, shows that people out of work fewer than five weeks are more than three times as likely to find a job in the coming month than people who have been out of work for over a year, with a re-employment rate of 30.7 percent versus 8.7 percent, respectively.
5. U6 — the rate that includes people who have stopped looking for work and employees who have settled for part-time work because they either lost or can’t find full-time work — remains at 17 per cent:
6. Market reaction so far is pretty muted. At pixel time, the S&P 500 was down 0.12 per cent, while yields on 10-year US Treasuries were at 2.94 per cent (after climbing above 3 per cent yesterday). Here, however, is one notable move:
We wrote that last month’s report was more mixed than the headline number and all the subsequent excitement suggested. We suspect the same thing here — that is, expectations had got ahead of reality, but what we’re seeing in this report is the same steady-but-woefully-inadequate pace of job creation in the private sector that we were seeing before the October surprise.
Whatever else in the economy has improved recently, this remains an abysmal jobs market.
Related link:
Payrolls: upside surprise, but… – FT Alphaville