Friday, November 05, 2010

Jobs report - Looks good

Given all of the wild moves in the market this week, it's hard to believe that the jobs report has arrived.

On the surface this is a strong report. 151k new jobs in October vs. expectations of just 60k. Average workweek and average hourly earnings were up slightly and the previous months data was revised upward. Unemployment was basically unchanged.

I'll have to get into the report a little further though because it seems to fly in the face of every survey going which suggests weakening in the economy. In fact, the Fed just sited a "weakening recovery" as their primary reason for pumping $600 billion into the market. This jobs report doesn't seem to show a weakening economy. So who is right? The Fed or the BLS?

On the surface this should drive stocks higher, but in today's bizarro world of Wall Street where bad news is good for stocks and good news is bad, who knows.

I'll update with more info as I get through the report.

Update: after going through the report I'll stick with my initial take that this was a good jobs number with a couple of caveats.

* 14.8 million people remain unemployed basically the same as last month.
* Temporary help services added 35,000 jobs.

Individual segments of the economy are the real issue:
* health care added another 24k jobs
* retail added 28k
* food services and drinking places added 24k
* manufacturing lost 7k

BTW: the headlines showing "The economy added jobs for the first time since May" are either disingenuous or ignorant. The Census jobs were falling sharply all summer so that dramatically impacted the headline data during the summer.

This is much like the old 2005 jobs reports as we saw manufacturing and high end service jobs disappear, while we add healthcare, Walmart clerks and waitresses. Not all jobs are created equal and I don't believe that you can build a robust economy on the back of temp jobs and Olive Garden waiters, job creation is still better than job destruction :)

1 comment:

The Hermit said...

Ya, right. Next month, the report will be revised and next year, it will be revised again, and next year.......