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Unemployment Report: November 6, 2009

Posted by Larry Doyle on November 6, 2009 8:55 AM |

The widely anticipated November Unemployment Report covering the month of October was just released. Let’s dive right in and take a look at the numbers . . .

July: 9.5%
August: 9.4%
September: 9.7%
October: 9.8%
– November Consensus Expectation: 9.9%
November Actual:10.2% !!!!

>> LD’s comments: this is the shocker and will get all the play. This rate is especially damaging because the participation rate declined. That drop would help the unemployment rate, all other things being equal. The fact that the rate jumped to 10.2% is an indication that job losses jumped much more than otherwise expected with a loss 558k jobs. The underemployment rate (U-6 rate) is 17.5%!!

II. NON-FARM PAYROLL (click here for definition of this term)
July: initial loss of 467k initially revised to a loss of 443k and now revised to a loss of 463k
August: initial loss of 247k revised to a loss of 276k, further revised to -304k
September: initial loss of 216k, revised to a loss of 201k, revised to a loss of 154k
October: a loss of 263k, revised to a loss of 219k
– November Consensus Expectation:
loss of 175k
– November Actual: a loss of 190k with revisions of +91k to prior months

>> LD’s comments: this month’s print is slightly worse than expected, but given the revisions the overall non-farm payroll could be spun in a somewhat positive fashion. In my opinion, there has been massaging of these numbers for many months and dare I say market participants are questioning the integrity of the reports. Recall that the birth-death model has likely overestimated job creation by upwards of 800k jobs. More of the same here? Perhaps, if not likely. Temporary workers did increase by 36k jobs.

July: 0.0%
August: +.2% revised to +.3
September: came in at .3 but then revised to .4%
October: .1%
– November Consensus Expectation: +.1%
– November Actual:+.3%

>>LD’s comment: a positive for those working, but in conjunction with no movement in the hourly workweek this is muted.

July: 33.0 hours
August: 33.1 hours
September: 33.1 hours
October: 33.0 hours
– November Consensus Expectation: 33.0 hours
November Actual:33.0 hours

>> LD’s comments: no indication here of any strength. This number rests at a low going back to 1964.

It’s all about the headline print of 10.2%. That number will spook consumers and keep Consumer Confidence under pressure. The Fed will clearly remain on hold for as extended as extended can be. I expect this report will cause Washington to talk about the need for another stimulus package.

At 8:10am:

2yr Tsy: .89%
10yr Tsy: 3.52%
S&P 500 Futures: +2
DJIA Futures: +14
U. S. Dollar Index: 75.78

At 8:50am, Post-Report:

2yr Tsy: .85%
10yr Tsy: 3.47%
S&P 500 Futures: -8
DJIA Futures: -68
U.S. Dollar Index: 75.86

Questions, comments, constructive criticisms always encouraged and appreciated.

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