‘An Ugly Report’

Such an ugly report – at least on the surface!

Not only were only 12k jobs created, all of the jobs were in the public sector (government). Private payrolls dropped 28k.

What impact did hurricanes play?

I admit, this is outside of my NFP skillset. Presumably the hurricanes had an impact, but why didn’t the hurricanes affect ADP which came in at 233k with upward revisions to the prior month?

Also, we had downward revisions of 112k which isn’t good, but seems impossible to be hurricane related.

Nothing good about the headline NFP data.

Having said that, hours worked ticked up – one good sign.

The unemployment rate kind of stayed the same at 4.1% (down from 4.3% back in July). It was actually 4.145% versus 4.051%, about as close to a 0.1% increase as you can get without it showing up when displayed as 1 decimal place (but the Fed will notice this). The Household survey added 150k jobs, but the main reason the unemployment rate didn’t rise to 4.2% (asides from rounding) was that the labor participation rate dropped 0.1% to 62.6%.

While not alarming on the surface, the Fed will have to think about this as at least a 0.1% move if not 0.2% move in the wrong direction on the unemployment rate when they meet next week.

The “good” news (for workers) is that monthly earnings “stayed” at 0.4% – they were originally reported as 0.4% last month, but that too, has been revised lower.

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